Preamble

The House met at half-past Two o'clock

PRAYERS

Mr. SPEAKER'S ABSENCE

The House being met, the Clerk at the Table informed the House of the unavoidable absence of Mr. SPEAKER.

Whereupon Sir ROBERT GRANT-FERRIS, The CHAIRMAN OF WAYS AND MEANS, proceeded to the Table and, after Prayers, took the Chair as DEPUTY SPEAKER.

PRIVATE BUSINESS

TRENT RIVER AUTHORITY (GENERAL POWERS) BILL

[Queen's Consent, on behalf of the Crown, signified]

Bill read the Third time and passed.

D. & J. FOWLER LIMITED AND ASSOCIATED COMPANY BILL

As amended, considered.

Bill to be read the Third time.

EAST SUFFOLK COUNTY COUNCIL (NO. 2) BILL [Lords]

Read a Second time and committed.

EXETER CORPORATION BILL [Lords]

Order for Second Reading read.

Bill to be read a Second time tomorrow.

MANCHESTER CORPORATION (GENERAL POWERS) BILL [Lords]

Read a Second time and committed.

HUMBER BRIDGE [MONEY]

Queen's Recommendation having been signified—

Resolved,
That, for the purposes of any Act of the present Session to amend the Humber Bridge Act 1959 and to confer further powers on the Humber Bridge Board, it is expedient to authorise—

(a) the payment out of moneys provided by Parliament of any sums required to be so paid in consequence of any provision of the said Act providing for the making by the Secretary of State of advances by way of loan to the Humber Bridge Board; and
(b) the payment into the Consolidated Fund of any sums, including interest, paid to the Secretary of State in respect of any such advances.—[Mr. Graham Page.]

Oral Answers to Questions — SOCIAL SERVICES

Strikers (Payments from Public Funds)

Mr. Bruce-Gardyne: asked the Secretary of State for Social Services what was the aggregate cost to public funds of national assistance/supplementary benefit payments paid to strikers and their dependants during industrial disputes and after return to work in the first five months of all the years between the passage of the National Assistance Act, 1948 and the passage of the Ministry of Social Security Act, 1966, and the cost of supplementary benefits payments during and after industrial disputes in the first five months in each of the years since the passage of the latter Act.

The Secretary of State for Social Services (Sir Keith Joseph): During the period January to May of the years 1951 to 1966 inclusive just under £400,000 was paid out in national assistance during trade disputes. During the same five months of the years 1967, 1970 and 1971 the approximate total of supplementary benefit paid out during disputes was £45,000, £441,000 and £3,900,000. Payments after disputes for the first five months of 1971 exceeded £460,000 but I regret that earlier figures are not available.
I will, if I may, circulate a more detailed reply in the OFFICIAL REPORT.

Mr. Bruce-Gardyne: I am grateful to my right hon. Friend. Can he confirm that the figures clearly demonstrate that a fairly dramatic change occurred after the application of Section 4 of the 1966 Act to strikers and their families, and that it is clear that we must go back to the Labour Government's 1948 Act if we are not to have more multi-national companies following the example of Ford and taking their investments to countries which do not oblige the taxpayer to subsidise strikes and those on strike?

Sir K. Joseph: My hon. Friend is going far beyond the lessons that we can draw from these figures. They certainly show a very sharp increase. That is the background against which the Government introduced the recent change in legislation.

Mr. Marks: Is not it significant that the views and the Amendments of the hon. Member for South Angus (Mr. Bruce-Gardyne) find no support from either the Government or the Opposition side in the Standing Committee considering the Social Security Bill?

Sir K. Joseph: Now the hon. Gentleman is provoking me, because my hon. Friend has a great deal of merit in his general worry about the impact of social security legislation on the motives of a minority of the people. But we must see how the present change in legislation works out.

Following is the information:
1. Total amount of national assistance paid out in trade disputes during January to May of the years 1951 to 1966 inclusive was £391,130.
(Figures for payments during disputes are available only from 1951 onwards.)
2. Payments of supplementary benefit in trade disputes during January to May of the years 1967 to 1971 inclusive:

Total Paid


Year
£


1967
44,382


1968
149,224


1969
205,127


1970
440,721


1971
3,880,067

3. All the figures quoted above relate to payments to the dependants of persons disqualified for receiving benefit for their own requirements together with the very small amount of payments made on a discretionary basis to persons disqualified for their own needs.

4. Separate statistics of payments after disputes are not kept and no estimates could be made without disproportionate work for the January to May period of previous years. Reported payments after disputes for January to May of the current year total £460,766.

Hospitals (Waiting Lists)

Mr. William Price: asked the Secretary of State for Social Services how many people are now awaiting admission to hospitals in England and Wales.

Sir K. Joseph: A total of 555,883, on 31st December, 1970.

Mr. Price: Is not it clear that the figure will cause shock and dismay throughout the country, particularly because many of those people had been waiting many months to see a consultant before they even got on the list? Is not it time for the Minister to end the scandal of people with money jumping the queue? Will he say that at least for the present National Health Service beds will not be used for private purposes?

Sir K. Joseph: The hon. Gentleman is quite wrong in the conclusions he draws from the waiting list, which is 1 per cent. lower than when I last reported. Private beds are always used for non-paying patients where there is medical priority.

Mr. Chapman: Nevertheless, whether the figure has gone up or down in the last year, does not my right hon. Friend agree that to have over 500,000 people waiting is a scandalous state of affairs? Does not he agree also that this is because we have neither the resources nor the facilities, in terms of finance and staffing, in the National Health Service as at present constituted, and that if we are to reduce this number radically in the next few years we shall have to look to the restructuring of the service in terms both of administration and of finance?

Sir K. Joseph: It is easy for hon. Members to use words like "scandalous". I allowed myself last time to use the word "disgraceful" about the waiting list and was sharply rebuked by some doctors who have pointed out how much greater the throughput of in-patients has been over the last few years. But, of


course, I agree that there is need for more resources.

Dr. Summerskill: Does not the right hon. Gentleman agree that waiting lists in themselves encourage people to pay in order to queue-jump and that the only ones who profit from this situation are the consultants and a privileged minority of patients? Is not this an abuse of the National Health Service?

Sir K. Joseph: I think that it is right that there should be an opportunity for the minority who wish to pay, provided they do not get in the way of priority needs for those who do not wish to pay, to have private treatment. But there is no evidence that there is queue-jumping.

Pensions and Benefits (Purchasing Power)

Mr. Arthur Lewis: asked the Secretary of State for Social Services whether he is aware that in the year ended 17th April, 1971 the £ sterling depreciated in purchasing value by 8·6 per cent.; and on this basis to what extent he anticipates that the proposed increases to be made in September will now offset the fall in the purchasing value of the £ sterling since the date when pensions and social security benefits were last raised and that which will take place between April, 1971 and September, 1971.

The Under-Secretary of State for Health and Social Security (Mr. Paul Dean): I am confident that the benefit increases next September will more than replace the loss of purchasing power since benefits were last increased.

Mr. Lewis: That may be the hon. Gentleman's opinion, but it is not the opinion of the old-age pensioners. Is he aware that the prices of meat, butter and eggs are going up and we are told that it is the deliberate policy of the Government to get prices up in order to get us into the Common Market? Is he further aware that old-age pensioners are fed up with the Government encouraging prices to go up and depreciating the purchasing value of their pensions?

Mr. Dean: The hon. Gentleman would be a little more convincing if the Opposition supported the Government in their fight against inflationary wage claims, which do more damage than anything else to the pensioners' shopping basket.

Sir G. Nabarro: Does my hon. Friend realise—party politics aside—that, whereas the purchasing power of the £ fell by 8·4 per cent. in the year that ended on 17th April, 1971, at the present rate it will fall a further 11·4 per cent. by 17th April, 1972, thus aggregating a 20 per cent. fall over two years, and that 20 per cent. was the amount of the increase in the single old-age pension? Is not my hon. Friend therefore chasing his own tail in ever-decreasing circles?

Mr. Dean: The fact is that the increase is the biggest ever in money terms. It will more than restore the value of the benefits, and, over and above that, new benefits have been introduced for priority groups—namely, the over-80s and the chronic sick.

Sir G. Nabarro: On a point of order. In view of the unsatisfactory nature of the reply, I beg to give notice that I shall seek to raise the matter on the Adjournment at the earliest opportunity.

Mr. Sillars: asked the Secretary of State for Social Services what is the purchasing power of the State retirement pension now, compared with the same date last year.

Mr. Dean: As measured by the Index of Retail Prices, the purchasing power of the standard retirement pension in May, 1971 was £4·55, compared with £5·00 in May, 1970.

Mr. Sillars: Does not that answer indicate that pensioners have had a hardup year under the Conservative Government and bear out the pensioners' contention that the rise which is due in the autumn is already totally inadequate and that another rise is required immediately?

Mr. Dean: No, Sir. The increase coming into operation in September will more than restore the value of the pension.

Mr. Gardner: Does not my hon. Friend agree that the increased pension in the autumn, which will be the highest ever paid by any Government, will do much to restore the purchasing power and to relieve the suffering inflicted on many pensioners by the inflationary policies of the previous Labour Government?

Mr. Dean: I am obliged to my hon. and learned Friend; he is quite right.


We succeeded after 1951 in clearing up the rip-roaring inflation, and we intend to succeed equally on this occasion.

Mrs. Shirley Williams: Will the Government stop talking about increases in money terms, as this means absolutely nothing in terms of increased purchasing power? Will the Minister admit that the supposed six months' improvement in the purchasing power of pensions has now dwindled to at most six weeks?

Mr. Dean: The increase will certainly improve the purchasing power of the pension. Over and above that, there are further increases for the over-80s and the chronic sick. Furthermore, this is the third Bill in this Session to improve the cash benefit for the needy sections of the community.

Mrs. Williams: Will the Minister answer my question?

Mr. Dean: I have answered it very effectively.

Mr. William Hamilton: asked the Secretary of State for Social Services by how much the basic retirement pension, for a single person and a married couple, respectively, has fallen in purchasing power since the last increase.

Mr. Dean: As measured by the Index of Retail Prices, between November, 1969 and May, 1971 the purchasing power of the standard retirement pension fell by £0·64 for a single person and by £1·04 for a married couple, at November, 1969 prices.

Mr. Hamilton: Does not that answer confirm the view expressed on this side of the House that within a few weeks of the increase in September there will be complete erosion and that two years from then pensioners, many of whom are in this state now, will be virtually starving? Is not the Minister aware that, immediately after the war, when Mr. Winston Churchill, as he then was, said that we were a bankrupt nation, the Labour Government increased the basic pension by 160 per cent? Now that we have been promised a "better tomorrow", will the hon. Gentleman give an assurance that he will make to tomorrow for the old-age pensioners and give them half what the Labour Government gave them in 1946?

Mr. Dean: I repeat to the House that the improvements coming into operation in September will more than restore the purchasing power of the pension, and that this is the third Bill in this Parliament to bring additional cash help to those in need. That in itself shows quite clearly that the Government intend to see that those who are in need do not suffer as a result of price rises.

Mr. Ridsdale: Does not this confirm how wrong trade union leaders have been to press for wage demands ahead of increases in productivity, and that they are the people who are responsible for the difficulties of the old-age pensioners?

Mr. Dean: I am obliged to my hon. Friend. Criticisms from the Opposition benches would be much more convincing if we had their support in our campaign against inflationary wage settlements which hit pensioners so hard.

Mr. Molloy: Would not the hon. Gentleman agree that there is nothing more disgusting than for him to use old-age pensioners as an excuse to hammer the trade unions? Does he not realise that many of these working-class old-age pensioners have been trade unionists and have contributed to the wealth of this country, and that his action and his reply today will go down in the records as most disreputable? Is not the only contribution that he and his colleagues can make to old-age pensioners to pack in the job and get out?

Mr. Dean: I am simply pointing out to the House that, if certain sections of the community take out more than is justified by productivity, it is the pensioners and others on fixed incomes who suffer most.

Invisible Hearing Aids

Mr. Greville Janner: asked the Secretary of State for Social Services whether he will now arrange for ear-level OL 67 invisible hearing aids to be made available under the National Health Service for adult patients; and if he will make a statement.

The Under-Secretary of State for Health and Social Security (Mr. Michael Alison): No, Sir. The performance of this aid falls short of that likely to be needed from an ear-level aid for adults.

Mr. Janner: Does not the hon. Gentleman agree that the time has come to abolish these nasty, red, old-fashioned ugly knobs from the ears of National Health Service patients? If the other invisible aids are all right for children up to the age of 14, why are they not all right for adults'? Why, for the sake of coppers, do older people have this indignity imposed upon them in addition to the suffering which their deafness inevitably causes them?

Mr. Alison: I appreciate the hon. and learned Gentleman's sympathy with the deaf. We all wish to avoid any difficulty. We are studying the possibility of introducing an invisible ear-level aid.

Mr. Pavitt: While not agreeing with some of the comments of my hon. and learned Friend the Member for Leicester, North-West (Mr. Greville Janner), may I ask the hon. Gentleman whether there is a possibility of producing these post-aural aids in a development area to help cope with the unemployment situation?

Mr. Alison: The technical and medical implications of the aid are being worked out and we hope to have proposals shortly. It is difficult to forecast the precise implications for employment at this stage.

Clothing Grants (Derbyshire)

Mr. Skinner: asked the Secretary of State for Social Services whether he will issue a direction to all Social Security offices in Derbyshire to the effect that applicants for clothing grants, previously made by Derbyshire Education Committee, will be treated uniformly.

Mr. Dean: No, Sir. Standing instructions issued by the Supplementary Benefits Commission already ensure that all local offices including those in Derbyshire apply the same standards when considering discretionary lump-sum payments to meet the cost of essential clothing. The amount allowed in a particular case will of course depend upon the individual circumstances.

Mr. Skinner: I am afraid that they do not all apply the same standards. Is the hon. Gentleman aware that the lead given by the Government in attacking the needy has spread to the Tory-dominated Derbyshire County Council, which has callously

withdrawn schoolchildren's clothing grants? Will he instruct his officials to apply a uniform standard so that they can repair at least some of the damage which the Government, in combination with the Derbyshire County Council, have inflicted upon schoolchildren in Derbyshire?

Mr. Dean: I do not accept what the hon. Gentleman said. If he has any individual cases which he thinks should be brought to my attention, I should be glad to look at them. I understand that the local education authority has withdrawn its necessitous clothing concession from people on supplementary benefit, but local officers of the Commission have made an arrangement with the authority with the aim of ensuring that the child of a supplementary benefit claimant should not go short of necessary clothing.

Unemployed Young Persons (Grants for Study)

Mr. Thomas Cox: asked the Secretary of State for Social Services if he will seek powers to make grants available to unemployed young people who wish to study at colleges of education while unemployed, and who are thereby denied any unemployment benefit they may have been receiving.

Mr. Dean: No, Sir. So far as social security is concerned, I do not think it would be right to make such payments regardless of the person's availability for work.

Mr. Cox: Surely the hon. Gentleman is aware of what a problem this is throughout the country. One shudders to think what the figure is now, but last January over 20,000 young people had been unemployed for more than three months. Is it not the duty of the Government, if they cannot give employment to young people, to give them the opportunity of doing something constructive? As a result of measures operated by his Department, however, the young people are, discouraged from doing so. The hon. Gentleman should give this matter far more consideration than he so far appears to have given it.

Mr. Dean: I do not accept what the hon. Gentleman said. If anyone undergoing a course can show that he is available for work and can take employment if employment is offered, his taking the course is not in itself a bar to the receipt


of unemployment benefit. If the hon. Gentleman is talking about courses at training colleges, where there are grants available, that is a different matter.

Mr. O'Malley: At a time when large numbers of young people are unemployed and are likely to remain so as a result of deliberate Government policy, would it not be sensible to allow these young people to obtain skills for future employment so that they have a better chance of getting a job? Is it not the case that at least a number of young people—indeed, unemployed people generally—cannot get jobs because they have not the necessary skills? Cannot he do something about this?

Mr. Dean: If a young person who, because he is unemployed, takes up a course can show that he is still available for employment should employment be offered, he is not debarred from unemployment benefit. If any hon. Member has a particular case in which he feels that this system is not working properly, I will look at it.

National Health Service (Charges)

Mr. Deakins: asked the Secretary of State for Social Services if he will now make a statement about revised charges for prescriptions.

Mr. Hunt: asked the Secretary of State for Social Services whether he has yet decided the price to be charged for the prepayment certificates which will continue to be available under the new scheme for graduated National Health Service charges.

Mr. Pavitt: asked the Secretary of State for Social Services if he has now completed his discussions with the British Medical Association and the Pharmaceutical Society regarding cost-related prescription charges; and if he will now announce his decision.

Sir K. Joseph: I am still considering these matters in the light of the views which were expressed to me by the representatives of the medical, dental and pharmaceutical professions during my recent discussions with them.

Mr. Deakins: Is the right hon. Gentleman aware that many people in constituencies like mine are apprehensive about his plans and that the sooner this appre

hension is dispelled the better? Is he aware that they are particularly worried if they are old-age pensioners, people living on fixed incomes, large families, low-paid workers and so on? Surely he has a duly to complete these discussions as soon as possible so that people may at least know the worst that is in store for them?

Sir K. Joseph: I shall try to arrive at a decision as quickly as possible but I want to pay full heed to the representations made to me.

Mr. Hunt: Will my right hon. Friend bear in mind that the majority of the prepayment certificates are used by those who are permanently sick and that any increase in the present charge will be regarded as a regrettable departure from the Government's sensible policy of concentrating help where it is most needed?

Sir K. Joseph: I am glad to say that the use of prepayment certificates has leapt in recent weeks.

Mr. Pavitt: Will the right hon. Gentleman pay special attention to the medical evidence and clinical considerations? Is he aware that in a test 30 placebos of coloured water were just as effective as medicine but that once any question of a charge for a prescription was raised the patients' acceptance of the doctor's infallibility about prescribing charges and treatment becomes suspect? Is he aware that there are strong clinical grounds why this graded scheme should not be introduced?

Sir K. Joseph: I will study the hon. Gentleman's argument, which is not one that has been put to me by the profession.

Mrs. Shirley Williams: Will the right hon. Gentleman now tell the House that the British Medical Association regards the suggestion of cost-related prescription charges as in conflict with clinical freedom and that the Pharmaceutical Society regards it as an administrative nightmare? Will he send this monstrosity back to the Treasury which so unwisely begat it?

Sir K. Joseph: The hon. Lady will recall that I said I would have a rational dialogue with the professions. They did not go in for the kind of shorthand in which she has indulged.

Abortion

Sir G. Nabarro: asked the Secretary of State for Social Services what estimate he has made of the extent of ingress into the United Kingdom of female aliens seeking abortions at National Health Service and private clinics: to what extent such foreign nationals are displacing British women seeking similar services; and whether he will take steps designed to diminish the flow of foreign women for the purposes stated.

Sir K. Joseph: The provisional figure for notified abortions on foreign women in the first quarter of this year is 2,617 or 11 per cent. of the total notified for England and Wales. Foreign women who come to this country for abortions are not eligible for free treatment under the National Health Service. I have no information on the effect at private clinics. This matter is one which I would expect the Lane Committee on the Working of the Abortion Act to consider.

Sir G. Nabarro: As my right hon. Friend has no information on activities in private clinics, may I ask him to pursue his inquiries further, having regard to the fact that there is now a flood of these foreign women entering Britain under the guise of ordinary tourists? Is he aware that charges are exorbitant? Why does my right hon. Friend give tacit consent to this particularly odious and repugnant traffic which is coming to be regarded as a form of invisible export?

Sir K. Joseph: The Act gives me no power in inquire into charges inside abortion clinics but the consent given to their practice is dependent upon certain undertakings and the observation of certain regulations. If there is any evidence that these are broken I have power to withdraw consent.

Mr. Simon Mahon: Is the right hon. Gentleman aware that he gave a promise to the House that the Committee he formed, very wisely, under Mrs. Justice Lane would be as broad-based as possible? Can he now tell the House whether he is satisfied that that Committee comprises such a broad base of opinion and that membership of religious organisations was no bar to membership?

Sir K. Joseph: I tried to recruit the Committee from people who had taken

no firm line on either side of the issue and who would therefore bring a fresh mind and a fresh judgment to the implications. I am satisfied that I have a high-quality membership.

Mr. Gardner: Will my right hon. Friend take steps to make sure that this country loses as quickly as possible its growing reputation as the abortion centre of the world? Will he bear in mind that most people in this country are outraged by this situation and want to see an end to this traffic?

Sir K. Joseph: I find myself in sympathy with my hon. and learned Friend—

Sir G. Nabarro: And with me, I hope.

Sir K. Joseph: —when he expresses disgust at some of the phenomena attached to the private sector of the abortion market. Nevertheless, I must have evidence before I can do anything about it. I rely upon the Lane Committee to look at the whole situation.

Tonsillectomies (Medway Hospitals)

Mrs. Fenner: asked the Secretary of State for Social Services how many patients are waiting for tonsillectomies in Medway hospitals.

Mr. Alison: A total of 439 at All Saints Hospital which serves the Medway area.

Mrs. Fenner: Is my hon. Friend aware that I very much regret that it is such a long list? While I am aware that tonsillectomies are not always as urgent as other surgical operations, may I ask whether my hon. Friend is aware of my constituent who has waited for five years? I have sought to draw the attention of my hon. Friend to the waiting list for other operations and to the pressures on general practitioner services. May I ask my hon. Friend to direct special attention to the exceptional burden placed on medical services in the Medway area?

Mr. Alison: I have noted my hon. Friend's general comments. As for the E.N.T. side, may I point out that following the reopening of the ward—the temporary closure of which caused an increase in the waiting list—an extra 20


beds will be available over and above the four which were lost as a result of the closure.

Approved Schools (Corporal Punishment)

Mr. Hardy: asked the Secretary of State for Social Services if he will issue new regulations governing the use of corporal punishment in approved schools, particularly to prevent or restrict the repeated use of the maximum penalties where boys of low intellectual capacity repeatedly abscond.

Sir K. Joseph: No, Sir. The Approved School Rules already provide that no boy with any physical or mental disability shall be caned without the sanction of the school doctor.

Mr. Hardy: May I first thank the Secretary of State for the correspondence I have had with his Department? May I ask him whether he would agree that it is barbaric that boys of very low intellectual capacity should be subjected to repeated use of severe or maximum corporal punishment as laid down by regulations? Would he not agree that this means that a boy of such low intellectual capacity will be driven to greater desperation and is therefore more likely to commit such offences as absconding?

Sir K. Joseph: It would certainly be barbaric to cane a boy who did not have the intelligence to know that what he had done was right or wrong. I am advised that this is no such case and I am confident to leave the judgment in this instance to the headmaster.

Mr. Alfred Morris: If the boy in this case is handicapped, as I understand him to be, is it not a deeply disquieting case? Moreover, is not the corporal punishment meted out to him inconsistent with an important recommendation in the Plowden Report? Would the right hon. Gentleman institute a full and searching inquiry into this case?

Sir K. Joseph: No. It is not right to bandy discussion about individual cases in the House. My evidence is that this boy is not handicapped, although he is intellectually below average. As for withdrawing the right of the headmaster to use corporal punishment when he thinks fit, I stand with the previous Gov

ernment on leaving that power, at any rate for the moment, with the headmaster.

Social Security Benefits (London Weighting)

Mr. Leonard: asked the Secretary of State for Social Services whether, in view of the higher cost of living in London and the widespread practice of employers, both in the public and private sectors, of paying a London allowance to their employees, he will institute an inquiry into the possibility of adding a London weighting to family allowances and all social security benefits.

Sir K. Joseph: No, Sir. Most benefits and allowances are paid at a flat rate without regard to individual means or commitments, so that a London weighting would not be appropriate. For those who are dependent on social security, the supplementary benefit scheme provides payments tailored to individual requirements, including actual housing costs.

Mr. Leonard: Is it not utterly illogical that people who are in employment should be deemed to warrant a London allowance whereas the majority of those on social security benefits should not?

Sir K. Joseph: I do not think so. I do not think that there is a parallel with workers. In the contributory insurance system there is a contribution for a flat-rate benefit. It is when people need to be made up to the minimum income through supplementary benefit that actual housing cost, which is the biggest differential in the cost of living between different parts of the country, is paid.

Mr. James Hamilton: I am glad that the right hon. Gentleman is disinclined to agree with my hon. Friend's supplementary question. Is the Secretary of State aware that a London allowance would be grossly unfair to the development areas in Scotland because of the low wages and heavy unemployment there, and that any increase in family allowances should be across the board?

Sir K. Joseph: I am glad to welcome an ally.

Human Tissue Act, 1961

Mr. Dalyell: asked the Secretary of State for Social Services what plans he


has to seek to amend the Human Tissue Act, 1961.

Sir K. Joseph: I would refer the hon. Member to the reply given to him by my right hon. Friend the Prime Minister on 15th June.—[Vol. 819, c. 229–30.]

Mr. Dalyell: Are the Government satisfied with the present state of the law?

Sir K. Joseph: We are not convinced that a change in the law would make an improvement.

Dentists

Mr. Boyden: asked the Secretary of State for Social Services how many dentists have left the National Health Service in the last 12 months.

Mr. Alison: In the 12 months to September, 1970, 690 general dental practitioners, including those retiring because of age and those who died, ceased practising in the general dental services in England and Wales. The total number of dentists working in the general dental services rose from 10,659 to 10,843.

Mr. Boyden: How many dentists leaving the Health Service defected into the private sector, and has not the number been steadily increasing?

Mr. Alison: The figures we have available do not show that but include the very large number of dentists who retired on age grounds.

Dr. Summerskill: Will the hon. Gentleman examine the significant regional differences in the number of dentists who have left the Health Service, and will he tell the House how many have left the Health Service since the introduction of the increase in dental charges?

Mr. Alison: I will look at both questions which the hon. Lady has asked and write to her.

War Pension Unemployability Supplement

Mr. David Stoddart: asked the Secretary of State for Social Services if he will now take steps to increase the war pension unemployability supplement with a view to ensuring that it provides reasonable compensation for the loss of a wage packet.

Mr. Dean: My right hon. Friend has already announced proposals for substantial improvements in the payments made to those war pensioners in receipt of unemployability supplement, which are to take effect in September this year.—[Vol. 814, c. 1499–1514.]

Mr. Stoddart: Is the Minister aware that that is a most unsatisfactory answer, and that the position of war pensioners will hardly be improved by the net supplement which will amount to about £1·18p? Is it not time to make fewer bureaucratic excuses and to treat war pensioners as the heroes they are rather than as paupers?

Mr. Dean: I do not accept what the hon. Gentleman says because, in addition to the increase in unemployability supplement, the war pension itself, and the special war pension allowances which many war pensioners receive, will be increased. Over and above that, those who are under pension age will be eligible for the new chronic sick package in the National Insurance Bill, on top of the war pension allowances, with the result that many will find their income lifted to over £30 a week, tax free.

Mr. Selwyn Gummer: Does my hon. Friend agree that it is important that he should negotiate with his right hon. and hon. Friends to ensure that the war pension is not taken into account when calculating rent and rate rebates?

Mr. Dean: I assure my hon. Friend that the various views which have been expressed by war pensioners' organisations are known to my right hon. Friends, who will take them into account in the consideration which they are now giving to this matter.

Synthetic Foods (Tests in Hospitals)

Mr. Duffy: asked the Secretary of State for Social Services in which hospitals synthetic foods have been consumer-tested on hospital patients; and if he will make a statement.

Mr. Alison: None, Sir of which I am aware.

Mr. Duffy: I am grateful for the hon. Gentleman's assurance, but does he not


think that his right hon. Friend should have shown more concern about the Press report that nutritional tests were being carried out on patients in hospital on behalf of private industry, at least to the extent of issuing a prompt denial?

Mr. Alison: My right hon. Friend has invited the Food Standard Committee, which advises my Department among others on the exercise of its powers under the Food and Drugs Act, to review the use of all unconventional proteins as food or as ingredients of food, and has asked interested parties to comment.

Earnings-Related Benefit (Entitlement)

Sir R. Thompson: asked the Secretary of State for Social Services whether he will take steps to provide that in cases where a man has more than one source of earned income his entitlement to earnings related benefit shall be computed by reference to the income tax paid on his total earned income in the year previous, and not as at present by reference only to his income from one particular source.

Mr. Dean: Entitlement to earnings-related supplement is already calculated on an employed person's total earnings, within the statutory limits, from all his employments, provided that the earnings in question are earnings from which income tax under Schedule E is deductible through P.AY.E.

Sir R. Thompson: Is my hon. Friend aware that there is great misunderstaning about this matter and that the present arrangements act very much to the disadvantage of people with more than one regular job, particularly in the printing trade, which may involve an extra day's work or an extra night's work once or twice a week? Is he further aware that a High Court judge has described the present administrative arrangements as unjust and purely for administrative convenience? Will he look at this matter again?

Mr. Dean: I understand my hon. Friend's point but would point out that it is not feasible to take into account casual employment. Furthemore, earnings from casual employment do not qualify for graduated contributions.

Homeless Persons (London)

Mr. O'Halloran: asked the Secretary of State for Social Services what is the estimated number of people in London who are homeless, and sleep in parks, under railway arches, &c.; and what plans he has to provide more hostel accommodation for those people.

Mr. Dean: The last count, attempted in 1965, found 275 men and women sleeping rough in London. This number would now be a considerable underestimate. Reception facilities are being developed and the provision of hostels is under review.

Mr. O'Halloran: I am grateful for that reply, but is the hon. Gentleman aware that during the past 10 years the number of common lodging houses in London has decreased by about 25 per cent. and that the number of people sleeping out is rising every year? Is it not time that he had a social conscience and did something about the situation by providing more hostel accommodation?

Mr. Dean: I fully accept what the hon. Gentleman says. This is one of the reasons why my right hon. Friend's working party on homelessness is now dealing with single homeless persons and why we are doing our utmost to try to ensure that local authorities, the Supplementary Benefits Commission, and voluntary bodies, who carry out such good work in this respect, are encouraged to respond to the greater need which exists.

Mr. Grimond: I thank the Minister for his statement. Is he aware that this is a very serious problem indeed, and that the estimate he has given could be met within several hundred yards of this building? In addition to the ordinary homeless in London, there are a great number of people who come to London to try to find jobs and who not manage to find anywhere to live.

Mr. Dean: I accept that this is a growing problem, and this is the reason that my right hon. Friend's working party is looking at this matter at the moment.

Renal Dialysis Treatment (Adaptation of Homes)

Dr. Summerskill: asked the Secretary of State for Social Services what


steps he is taking to eliminate delay by local authorities in the adaptation of homes for renal dialysis treatment.

Mr. Alison: I would refer the hon. Lady to my right hon. Friend's reply to the hon. Member for Manchester, Wythenshawe (Mr. Alfred Morris) on 18th June.—[Vol. 819, c. 151-2.]

Dr. Summerskill: Would the hon. Gentleman not agree that one of the causes of the serious delays by local authorities in adapting homes is that there is no central financing of cost and that in each case a time-consuming means test has to be carried out?

Mr. Alison: Local authorities are autonomous bodies, but my right hon. Friend has sent a notice to local authorities suggesting improvements in the procedure for this sort of assessment.

Temporary Accommodation

Mr. Meacher: asked the Secretary of State for Social Services how much temporary accommodation at the initial stage of reception is at the present time provided by county councils and county boroughs in England and Wales, respectively, for whole families, including fathers and elder children as well as exclusively for mothers and younger children; and


EXTRACT FROM RETURNS MADE TO THE DEPARTMENT OF HEALTH AND SOCIAL SECURITY OF HOMELESS FAMILIES LIVING IN TEMPORARY ACCOMMODATION


Number of Families Living in Temporary Accommodation provided by County Councils and County Borough Councils in England at 31st December each year



County Councils



1966
1967
1968
1969
1970*


Families with man, woman and child or children


(a) in family accommodation†
307
489
606
723
745


(b) in communal accommodation
16
24
16
20
40


Total
323
513
622
743
785


Families with only woman and child or children


(a) in family accommodation†
147
174
188
209
252


(b) in communal accommodation
27
27
27
26
42


Total
174
201
215
235
294


Total of all families
497
714
837
978
1,079

how this provision has changed over the last five years.

Mr. Dean: Information in the precise form asked for is not available. I will however, if I may, circulate in the OFFICIAL REPORT figures showing separately the numbers of complete and incomplete families living in family accommodation and communal accommodation at the end of each of the last five years.

Mr. Meacher: Will the Minister issue a circular to all local housing authorities reminding them of the powers of the Supplementary Benefits Commission under Section 25 of the Ministry of Social Security Act, 1966, to insist on the provision of temporary accommodation for the homeless, and not merely provide the homeless with money to rent accommodation that is not available? Since the incidence of homelessness is rising so fast, will he use this provision as a means of pushing up the present unreasonably low level of temporary accommodation?

Mr. Dean: I will gladly look at those points, but I would again stress that my right hon. Friend's working party is looking at this whole area at present.

Following is the information:

County Borough Councils


Families with man, woman and child or children
1966
1967
1968
1969
1970*


(a) in family accommodation†
237
296
466
524
572


(b) in communal accommodation
5
13
6
6
7


Total
242
309
472
530
579


Families with only woman and child or children


(a) in family accommodation†
133
128
170
215
235


(b) in communal accommodation
52
34
28
35
57


Total
185
162
198
250
292


Total of all families
427
471
670
780
871


* Includes families without children or only with children over 16 years of age.


† "Family accommodation" is accommodation where families both cater for themselves and sleep in a family unit.

Oral Answers to Questions — SEVERELY DISABLED PERSONS (DEPARTMENTAL LIAISON)

Mr. Carter-Jones: asked the Prime Minister what progress has been made in his consideration of instituting automatic liaison between Departments in cases affecting the most severely disabled people who can be helped by means of technology to earn a living but who have yet to overcome the obstacle of being severely disabled.

The Prime Minister (Mr. Edward Heath): There is already close liaison between the Departments concerned, but if the hon. Gentleman likes to let me have details of any apparent failure of co-ordination, I should be glad to have them examined.

Mr. Carter-Jones: I thank the Prime Minister for his answer. I believe I can provide him with cases in which there have been excessive delays. Would he not agree that for people who are severely physically disabled, the psychological impact of having to wait can be disastrous? Therefore, would he make sure that those severely disabled people who might be able to work are, in fact, helped and, at the time of assessment, are visited by hospital authorities, by local welfare officers, by officers from the Department of Employment and, in the case of the young, by education authorities? Finally, would he do something about the "egg and chicken" argument involved in the fact that a disabled

worker needs a vehicle to get a job but has to have a job before he can get a vehicle? This problem has existed for a long time. Would he investigate it again?

The Prime Minister: I am quite prepared to arrange for any of these problems to be looked at. The hon. Gentleman in his supplementary question covered a very wide range of aids for the disabled. I agree that one of our prime purposes must be to give those who are able to work the assistance in this technical form which they need. That is why the Department of Employment is involved in these matters. On the other hand, the Department of Health and Social Security gives any help it can to those disabled who require assistance of various other kinds to overcome their disability. Local authorities, too, have power and resources to help, and it is natural that homes should be visited by their representatives.

Mr. Boyd-Carpenter: Is my right hon. Friend aware that a number of devices are being developed which can give great assistance to disabled people in living and working normally but that it seems to be the responsibility of no particular Department to secure that they are put into production? Would he therefore consider putting responsibility generally for the disabled on one Minister, rather in the same way that the Secretary of State for Social Services has overall responsibility for war pensioners?

The Prime Minister: A remarkable series of such devices has been produced, largely invented in this country, although we have also taken advantage of those produced in Europe and North America. I assume that many hon. Members have seen the exhibition at the Disabled Living Foundation in Kensington which shows these devices very clearly. I will certainly do as my right hon. Friend asks and see whether the whole of this matter should be placed under one Department. But it has been accepted in the past that the Department of Employment has great experience in the provision of these employment devices and is very sympathetic towards those who want to use them to earn their living. I will look at the whole problem again.

Mr. Alfred Morris: Could we be assured by the Prime Minister that the important matter raised by my hon. Friend the Member for Eccles (Mr. Carter-Jones) will be fully dealt with in the report from the Government under Section 22 of the Chronically Sick and Disabled Persons Act, 1970? Could the Prime Minister say when we are to expect that report?

The Prime Minister: I cannot answer that question without notice, but I will endeavour to see that in the report the fullest information is given to the House.

Oral Answers to Questions — PRIME MINISTER AND PRESIDENT POMPIDOU (TALKS)

Mr. Marten: asked the Prime Minister what plans he has for a further official meeting with President Pompidou.

The Prime Minister: As I told the House last Thursday, none at present.—[Vol. 819, c. 638–9.]

Mr. Marten: Did my right hon. Friend notice the remarks of the German Foreign Minister yesterday saying that the German aim was to create a European Government? How does that square with President Pompidou's idea of a confederation?

The Prime Minister: I have already explained to my hon. Friend that at the moment there is no political institution in Europe for the existing Community and none proposed for an enlarged Community. If these political institutions are to be brought about, it will have to happen

by agreement between the member countries. They can be brought about only by a new treaty. There would have to be a process of discussion between members about the form that they would take. It is well known that there axe differences of view on this subject between existing members of the Community, and there may be further differences in an enlarged Community. That is not unusual in developing institutions.

Mr. McBride: Would not it be of advantage to ask President Pompidou to clarify his reference to
disruption of our traditional food supplies"?
Has the Prime Minister seen the differences between Community and United Kingdom prices printed in yesterday's Daily Telegraph? Does not the right hon. Gentleman agree that the British housewife has no intention of subsidising the inefficient French agricultural system, which would be the result of Britain entering the Common Market?

The Prime Minister: In his broadcast, President Pompidou was referring to changing patterns of trade. In fact, patterns of trade have been changing between this country, the Commonwealth, Europe and North America, certainly over the last 25 years, and they have changed for individual members of the Commonwealth as well as for individual members of the Community.
As for the last part of the hon. Gentleman's question, the negotiations have been carried on to see whether a suitable arrangement can be found. They are going on at the moment in Luxembourg. We had better await the outcome of the negotiations. Then, when the White Paper is published, the House will be asked to balance the opportunities open to us in an enlarged Community, especially to our industry, against the cost set out in the contribution to the finances of the Community to which all countries contribute.

Oral Answers to Questions — EUROPEAN ECONOMIC COMMUNITY

Mr. Skinner: asked the Prime Minister if he will make a Ministerial broadcast following the conclusion of the Common Market negotiations.

Mr. Deakins: asked the Prime Minister if he will make a Ministerial


broadcast after the next round of negotiations with the European Economic Community.

The Prime Minister: If I decide to make a Ministerial broadcast on these negotiations, an announcement will be made at the appropriate time.

Mr. Skinner: If and when the Prime Minister makes a Ministerial broadcast, will he ensure that no member of the Conservative Party is invited to act as interviewer? He might even take along Prince Philip to speak on behalf of the farmers. Does the right hon. Gentleman appreciate that the House will understand very readily if David Dimbleby is not enlisted to act as interviewer and to ask personal, provocative questions such as where the right hon. Gentleman got his money to buy his yacht?

The Prime Minister: The custom of Ministerial broadcasts, long hallowed through different Administrations, is that the broadcast is made by the Minister alone.

Mr. Deakins: If the right hon. Gentleman makes such a broadcast, will he ensure that he covers the disadvantages as well as the alleged advantages of entry?

The Prime Minister: Yes, Sir. I should endeavour to set out as fair a balance as I can. If I were to make a Ministerial broadcast, under present arrangements, it would be open to the Leader of the Opposition also to ask to make a broadcast in order to set out his views and to strike a similar balance.

Sir Harmar Nicholls: Before any such broadcast can take place, we shall have a White Paper. Will my right hon. Friend make sure that the White Paper envisaged takes into account the White Paper issued by the previous Government only last year, since they must be complementary to each other? It is to be hoped that the second White Paper does not intend to gloss over what was in the first one by failing to answer the questions posed in it, since that would result in the value of future White Papers being suspect.

The Prime Minister: I assure my hon. Friend that there is no desire to gloss over any aspects of this matter. What the Government wish to do is to set out all the facts of the situation and the

arrangements made during the negotiations. When the White Paper was produced by the last Administration, the present Leader of the Opposition, then Prime Minister, made it plain that before the negotiations began it was not possible to set out specific details of what the consequences would be. For that reason, the procedure was adopted of setting out the brackets within which various arrangements might be made. When the negotiations on major items are concluded, we shall be in a better position to indicate the consequences in more detail.

Mr. Raphael Tuck: asked the Prime Minister how many letters he has received making representations against his refusal to hold a referendum before taking Great Britain into the Common Market.

The Prime Minister: Precise figures are not available but a number of the letters I receive on the Common Market refer to the possibility of a referendum.

Mr. Tuck: Is the Prime Minister old enough to remember that Mr. Baldwin went to the country in 1924 merely on the question of tariff reform because he had not a mandate from the people, even though the decision was revocable? In view of the fact that, as yet, the Prime Minister has no mandate from the British people to enter the Common Market, and in view of the fact that he stated categorically before the General Election that it was unthinkable that Britain should enter the Common Market unless the majority of the British people were in favour of entry, is not the right hon. Gentleman in honour bound to test the opinion of the electorate before embarking on what will be the most tremendous and irrevocable step in Britain's history—or is he afraid to do so?

The Prime Minister: I must confess that I am not old enough to remember the incident in 1924 which the hon. Gentleman recalls. But my reading of history has shown me that in fact it occurred in 1923.

Mr. Woodhouse: Will not my right hon. Friend agree that one of the strongest arguments against a referendum is that it is impossible to consult the overwhelming majority of British people who will be affected by the decision, since they are not yet born?

The Prime Minister: My hon. Friend is putting emphasis on the importance for the future of any decision that the House may take. I prefer simply to operate through our normal parliamentary means, which I think the great majority of the House will accept. They have been tried and proved over the centuries. I think that the House will be wise to adhere to them. I also note that many of those who ask for a referendum have been most critical when the system has been operated in other countries. We have seen the difficulties which arise from the way in which questions in a referendum are put to those who vote. This is one of the main reasons why, except in small local issues, we have not resorted to referenda.

Mr. Tuck: Let us have a General Election.

Oral Answers to Questions — SECRETARY OF STATE FOR EMPLOYMENT (SPEECH)

Mrs. Castle: asked the Prime Minister whether the public statements on unemployment made by the Secretary of State for Employment in Washington on 26th May represent the policy of Her Majesty's Government.

The Prime Minister: My right hon. Friend did not make a public statement on unemployment in Washington. He did, however, discuss Government policy when talking to British Press correspondents there.

Mrs. Castle: It is to those public discussions with the Press that I am referring. They were reported in this country, of course. Does the Prime Minister agree with his Secretary of State that the Government have no intention of giving any stimulus to the economy until wage increases have been stabilised at around 8 per cent.? What level of employment is the right hon. Gentleman prepared to tolerate to achieve that stabilisation?

The Prime Minister: The right hon. Lady is not entirely correct. My right

hon. Friend did not say that wages had to be stabilised at the level of 8 per cent. The Chancellor of the Exchequer has always made it quite plain—he did so in the Budget—that when he considers that a further stimulant to the economy is required, he will not hesitate to provide it.

Mr. Roy Jenkins: Will the Prime Minister tell us when the measures correcting the Budget judgment are to be announced.

The Prime Minister: I should have thought that the right hon. Gentleman, as a former Chancellor of the Exchequer responsible for the economy of the country, would not have thought it worth his while to try to put a trick queestion like that. My right hon. Friend is doing what the right hon. Gentleman did, which is to study the way that events are working out.

Oral Answers to Questions — NEW MEMBER SWORN

Neville Devonshire Sandelson, esquire, for Hayes and Harlington.

Oral Answers to Questions — BILL PRESENTED

UPPER CLYDE SHIPBUILDERS (PUBLIC OWNERSHIP)

Mr. Anthony Wedgwood Benn, supported by Mr. William Ross, Dr. J. Dickson Mabon, Mr. William Hannan, Mr. Bruce Millan, Mr. Hugh McCartney, Mr. William Small, Mr. John Rankin, Mr. Richard Buchanan, Mr. Frank McElhone, Mr. John Robertson and Mr. Dick Douglas presented a Bill to make provision for and in connection with the continuation of the undertaking of Upper Clyde Shipbuilders Limited under public ownership, the development of the management structure thereof, and the carrying on of the undertaking; and for purposes connected therewith: And the same was read the First time; and ordered to be read a Second time tomorrow and to be printed. [Bill 195.]

SALE OF OFFENSIVE LITERATURE

3.32 p.m.

Mr. Michael McNair-Wilson: I beg to move:
That leave be given to bring in a Bill to regulate the sale of offensive literature.
The Title of the Bill has been drawn in wide terms to allow it to cover a number of different tasks. It is particularly aimed at doing away with the window displays outside pornographic bookshops—those shops which are euphemistically called "dirty" bookshops.
There is no intention in the Bill of limiting the rights of adults to buy whatever literature they require. Since the Obscene Publications Act, 1959, we have all become aware of how pornographic bookshops have multiplied not only in the centre of London but throughout the country. They have reached a stage where many people are writing to their Members of Parliament asking what this House proposes to do about restricting the displays in and, indeed, about the growth of these shops. Accepting the right of the ordinary person to read what he or she wishes, I am sure that it would not be our wish to limit the sale of pornography from those shops so much as to make them a less unpleasant form of commercial enterprise than they now are. While we must recognise that there is a minority taste for pornography—I stress that I believe it is a minority taste—I also think that we have a right, when considering minority tastes, to make sure that they do not and are not allowed to have preference over the wishes and the moral standards of the great bulk of the population. I submit that those bookshops, particularly the window displays, are indeed giving a minority a preference over the majority which we surely should stop.
I stress the displays of these bookshops because, alas, they are no longer limited to areas like Soho but are spreading out into the suburbs of London, as I know since I represent a London suburban constituency. Indeed, from the letters which I have already received since the Bill was announced they are to be found in towns and cities throughout the United Kingdom and are clearly giving a great deal of offence.
The tragedy is that the kind of literature sold by these shops, far from being of any literary merit, is frankly trash. Even worse, it is depraved trash. It is trash which suggests that sex must always be depraved, perverted or brutal. It is trash which suggests that violence is part of our daily diet. Not unnaturally, parents are concerned about the possible effects which these shop windows may have on their children who see them on their way home from school. What is worse, they know their children are at liberty to go into those shops and buy such magazines without any check at all.
It therefore seems that the time has come for some kind of control to be exercised over these bookshops. I suggest that we should follow the practice in Sweden. The Swedes are further ahead than most European countries in their approach to the sexual morals of the modern society. They have laws which prohibit window displays outside these shops. They restrict the advertising of such shops to the one word "Porno" written over them, while the windows remain blank. Thus, the freedom of the adult is there to buy a pornographic book, but equally the public are not affronted by the indecent or depraved display which these shops go in for. This, therefore, would be the first purpose of the Bill.
The problem is to define "pornography". Rather than seek to use the Obscene Publications Act for that definition, I suggest that we might use the concept of the reasonable man and his opinion as the basis for the Bill. This concept was first advanced by the late Lord Halsbury in a libel case in 1894. His test of libel was
whether, under the circumstances in which the writing was published, reasonable men would be likely to understand it in a libellous sense".
It seems that if we use the concept of the reasonable man and his opinion, we will shift the onus from the person who feels that something is obscene but has to prove that it tends to deprave or corrupt to the shopkeeper who will have to prove that his window display is not offensive. I suggest that at the first whiff of this Bill a good many of the window displays would be taken down very quickly. I also suggest that we should follow the Swedish practice of


limiting these shops to some very simple sign like "Porno", "Porn Shop" or "Sex bookshop".
Lastly, the Bill aims to safeguard children from the kind of literature which is now being sold. I suggest a measure of censorship, for I would have it that no one under 18 years of age should be allowed to buy any literature from these shops.
I believe that if my Bill achieves those three principal tasks it will get rid of a nuisance and an affront to public decency which is causing a great deal of concern to many people. I appreciate that at this late stage in the Session my Bill is unlikely to go through its remaining stages, but I hope that the House will give me leave to introduce it because I believe that the window displays of the bookshops are an affront to public decency, and should not be countenanced by a civilised society.

3.40 p.m.

Mr. R. T. Paget: I rise to oppose what I regard as a thoroughly silly proposal. Censorship has been tried by countless Governments through countless generations. It never works. It only makes the censored subject more attractive. The Danes had the courage to say, "Let us stop this nonsense". They held a pornographic festival, which was a great success. After three years they had another one and lost £150,000 on it because everybody had got bored with the subject. Equally, that has been the fate of their shops. Pornographic shops in Denmark have been reduced to quite a small percentage of what they were. Indeed, pornography

has become almost entirely a Danish export trade, and the same sort of thing seems to be happening here. Because there is permissiveness about this kind of thing, it is becoming more and more of a bore, and I believe that that is the way to deal with it.
The idea that we should make a shop look respectable seems to be the most absurd of the lot. After all, if the shop looks objectionable it at least confines its custom to those who want something objectionable and are sufficiently uninhibited and shameless to go through the door. If the shop has a nice, restrained, polite look about it, with a small if rude word over the door, many people may go into it.
I regard the Bill as silly and retrograde, and I do not think that the hon. Member should be given leave to introduce it.

Question put, pursuant to Standing Order No. 13 (Motions for leave to bring in Bills and nomination of Select Committees at commencement of Public Business), and agreed to.

Bill ordered to be brought in by Mr. Michael McNair-Wilson, Mr. Biggs-Davison, Mr. Deakins, Mr. Iremonger, Mr. Kaufman, Mr. St. John-Stevas, and Mr. Parkinson.

SALE OF OFFENSIVE LITERATURE

Bill to regulate the sale of offensive literature; and for purposes connected therewith, presented accordingly and read the First time; to be read a Second time upon Friday, 16th July, and to be printed. [Bill 194.]

Orders of the Day — SUPPLY

[23RD ALLOTTED DAY],—considered.

Orders of the Day — CIVIL ESTIMATES, 1971–72

Class V, Vote 1, Ministry of Agriculture, Fisheries and Food

Motion made, and Question proposed,
That a sum, not exceeding £40,951,000, be granted to Her Majesty out of the Consolidated Fund, to defray the charge which will come in course of payment during the year ending on 31st March, 1972, for the salaries and expenses of the Ministry of Agriculture, Fisheries and Food; of the Royal Botanic Gardens, Kew; of the White Fish Authority and Scottish Committee; of the Plant Variety Rights Office; and of the Meat and Livestock Commission.

3.44 p.m.

Mr. Fred Peart: This is the first major debate on food and agriculture during the first year of the Administration of right hon. and hon. Gentlemen opposite, and I believe that it is important to assess the attitude of and the development of those policies by the right hon. Gentleman the Minister.
Perhaps I may add a personal note. I participated in almost every debate on agriculture from 1945 until I became a Minister. In the interim three years I have had a feeling of nostalgia about agriculture debates, and so it is a pleasure for me to participate in today's debate.
I must declare an interest, because I am a member of the Board of the F.M.C. That is an honourable thing to do. Most Conservative Ministers have a special interest because they are farmers, but today I make no complaint of that. We all know the position, but it is right that an hon. Member should declare his interest.
Today we are debating the whole food and agriculture policy of the Government. The Minister, with the full approval of his party, indicated during the election campaign that there would be a major policy change. I believe that the right hon. Gentleman was very frank, not only during the election, but before it. At least he takes the matter seriously.
The history of our agricultural policy in the post-war period must be examined quickly before we examine carefully and critically the new policies which are now to affect this great industry, and not only the industry but the consumer and the nation generally.
The main event was the passing of the 1947 Agriculture Act. Many right hon. and hon. Members still in the House will recall the long discussions on that major Measure, for which there was broad approval. It was a charter for the industry. I shall not deal with the specific proposals of the Act, but it worked a revolution in the countryside, and many hon. Members will recall in detail Part I, which laid down the system of guaranteed prices and assured markets, and Section II, which laid down specifically that there should be an annual review and also a special review of conditions in the industry if needed. Another important provision, which we must recall as we discuss the problems of the industry today, is that which enabled producers to plan ahead. It was linked with assured markets and guaranteed prices.
Part V of the Act dealt with administration, with the setting up of county agricultural executive committees. A great partnership developed in the industry. That Act has not yet been amended to fulfil the policies of the present Administration. One purpose of that Measure was to enable the farming community, the N.F.U., the agricultural workers' union, and the landowners of agricultural land to play their part in a unique administrative set-up. I remember the discussions about the membership of the executive committees. There were to be three farmers' representatives, two from the agricultural workers' union, two from the C.L.A., the county landowners, and the provision for the Minister to appoint a certain number up to five.
For a quarter of a century successive Governments have pursued that policy, though the Act has been modified in places and, with the passage of time, the discipline sections have been dropped. The Conservative Administration's 1957 Act, although continuing the main principles of the 1947 Act, introduced limitations to the amount by which the Government could reduce the value of guarantees in any one year. I remember,


too, the arguments about the introduction of deficiency payments.
Whatever faults there may have been in the set-up proposed by the 1947 Act brought in by the first post-war Labour Government and that distinguished Minister of Agriculture, Mr. Tom Williams, there was general approval for the policies which flowed from that Measure. It is admired not only here but in many other countries.
So we must consider whether it is right for the industry and the consumer to change this system. When I was chairman of the Ministerial Committee of O.E.C.D., I met other Ministers in Europe and I remember how often they expressed their admiration for the present British system, which is now waiting to be butchered by the Minister—[HON. MEMBERS: "Oh."] When I say "butchered" I mean changed and destroyed. If hon. Members follow my argument, no doubt they will say that it is right to do this. Others would say that this policy will harm the industry and the nation in the long run. Even though the system has been admired, there is now to be a fundamental change which will have implications for the farming community and the whole nation and, above all, for the consumer. This debate is not just about the farming community. It is also about food supplies and the position of the consumer. There is this partnership in the community.
I believe that we can see an end to the system of guaranteed prices and the transfer of the cost of agricultural support from the Exchequer, the taxpayer, to the consumer. That has been announced. Indeed, right hon. and hon. Gentlemen opposite fought the election on it, and the country accepted. The right hon. Gentleman has a mandate, but that is not to say that the policies are not wrong. I am simply saying that right hon. Gentlemen said this and I am right to explain why this policy will have disastrous effects on the consumer in particular.
I have often warned the House about the dangers of this policy. I have said that the present Administration would drop the well-tried deficiency payments system and slap taxes on imported food. This is the meaning of the levy system which we are to debate on Thursday. The levy system of the E.E.C. means a tariff

wall against suppliers from outside countries and I assume that that is the policy of right hon. Gentlemen opposite.
I would argue that this will seriously affect the consumer interest, and, in the end, also the farmer, who will face a loss of security and stability. After all, a target price is no substitute for a guaranteed price. So it could well harm our traditional suppliers in large sections of the Commonwealth, like New Zealand, Australia, Canada and the underdeveloped countries.
Perhaps hon. Gentlemen are doing that because they want to phase our policy in with the common agricultural policy of the Community after terms have been announced. This is a strange way to negotiate. It would be a strange irony of history if we destroyed a system which had worked and replaced it with one which had not and then, at a later stage, helped to change the system which we had joined for the old system, which many people in Europe admire. We must consider carefully the ending of main production grants which have been so helpful to so many sections of our industry, like the hill farmers. The Minister has argued that British agriculture has been stagnant for a long time. That was his charge against the Labour Administration, which I reject.
Hon. Members will have read the recent O.E.C.D. Report which gives basic statistical comparisons for the 23 countries in the organisation for the year 1968. It shows that, in the United Kingdom, 3·1 per cent. of the population are engaged in agriculture, producing 3 per cent. of the gross domestic product. Our nearest competitors in this record are Belgium with 5·6 per cent. producing 5·4 per cent. of the g.n.p., and the Netherlands, with 7·9 per cent. producing 7 per cent. The other Common Market countries are way behind. For Germany, the figures are 10·2 per cent. producing 3·9 per cent., France, 15·8 per cent. producing 6·6 per cent., and Italy, 22·5 per cent. producing 11·1 per cent.
So we compare very well with most countries with whom we deal. This is a tribute to our industry and our farmers and also, despite all the criticisms of the system, a tribute to the policies of the system and the administrative
structure which has operated under the basic 1947 Act.

Mr. Tom King: I thought that the right hon. Gentleman was using his example to illustrate a trend, but all he did was quote one absolute statistic from 1968 in relation to other countries. This gives no indication of whether the industry was doing well or badly under his Administration.

Mr. Peart: I was trying to show that this trend in the post-war period, through security of assured markets and guaranteed prices and the system of annual reviews has enabled the industry to develop considerably. Technically, we lead the countries that I mentioned, and precisely due to this system.
Turning to the National Agricultural Advisory Service, I would say that our technicians who have been trained in our agricultural faculties, played their part in the N.A.A.S. This is very important and I am worried about the ending of a system which has worked so well. The Minister has proposed major changes in the Ministry. The N.A.A.S. is to be altered. It is to be given a new name.
I believe that the morale of the N.A.A.S. or the new organisation, the Agricultural Development and Advisory Service, has been affected. John Charrington in the Financial Times wrote recently:
The morale of the present members of the N.A.A.S., particularly in the field of agricultural research, is abysmal at the moment. They fear that redundancy will affect between 25 and 30 per cent., instead of 5 or 10 per cent.
The Minister will no doubt argue the case for his changes and his White Paper, but I would argue that the N.A.A.S. is valuable to the Community. I know that there are people running around the Treasury who wish to destroy the N.A.A.S. I resisted that and I hope that the Minister will continue to do so, although he has made changes. The N.A.A.S. has given tremendous service to the individual farmer and has been admired in many parts of the world.
I hope that the bodies which I set up in my Bill and which are important to the future development of agriculture—these policies were pursued by my right hon. Friend the Member for Anglesey (Mr. Cledwyn Hughes)—for example, the Central Council for Agricultural and Horticultural Co-operation, will continue,

and that there will be no attempt to end a policy which I believe is working.
Again, the Minister has shown his spite over one major development—the Rural Development Board, which has been debated previously. I cannot understand his attitude. It was an organisation accepted not only by the local farmers but by the local land owners, and even in that area, which is part of the area from which I come, by political opinion in sympathy with the present Government. I cannot understand why the Minister has attacked such a Board.
The National Farmers' Union issued a major statement on the matter in May of last year, saying:
The National Farmers' Union regrets the Government's decision to terminate the work of the Northern Pennines Rural Development Board and believes the decision to have been a mistaken one.
The statement goes on to argue, as we all did when we created the Board, that the problem of the hill areas is acute and that there could be depopulation of those areas through the unprofitability of hill farming. Hon. Members from both sides who come from the area—and the Minister's Parliamentary Private Secretary knows this to be true—know that the Board was achieving some success. It did not have time to complete its full work. It was only beginning, but it was developing and creating confidence. The words of the N.F.U. should be borne in mind. It said:
It was against this background"—
the background of the problems of the hill and upland areas—
that the imaginative step was taken of establishing a Northern Pennines Rural Development Board, charged with the task of reconciling the interests of forestry, tourism, amenity and agriculture.
I am sorry that the Minister has adopted an ideological attitude. In the White Paper he talks about the Government's philosophy. It is the same as the Government's attitude in industry, the lame duck philosophy. I believe that the Boards are needed even if we wish to go into Europe and to compete in the Common Market, because it is right to have an effective regional policy for agriculture. Here was the first attempt to create in some of our problem areas statutory bodies which would achieve success. The tragedy about the ending of the one in


the North is that it was backed up by the local farming community and the local land owners.

Mr. Peter Mills: We do not want it in the West.

Mr. Peart: We wanted it in the North, and that is what I am talking about. I believe that when they come to realise what has happened the vast majority of people will regard the decision as a petty and spiteful decision by a Minister wedded to dogma.
There is also to be the ending of all the voluntary bodies that have been listed. I need not go into detail about them. They were organisations in which farmers and land owners in different parts of the country played their part. Just for a small financial gain, they had to go. There has been a major destruction of the county committees, a dreadful step backwards. Those committees have worked well and provided leadership in areas where it is needed.
The Government have pursued a doctrinal party policy towards the needs of agriculture.

Mr. Peter Mills: Ask the farmers.

Mr. Peart: I am prepared to go with the hon. Gentleman to the South-West or to any National Farmers' Union meeting and argue with the farmers about what has been done in the name of the Conservative Party. I hope that he will invite me, and I will invite him to talk to the Cumberland farmers as well.
We are dealing not with the farming community, although it is important, but with a system which will increase prices for the consumer. We all know the arguments about the Prime Minister's "at a stroke" speech. We have seen the political gaffe of the Minister of Agriculture, his facetious remark on the radio that we should not take seriously the Prime Minister's statement that the Conservatives could cut the prices of food to the consumer at a stroke. Why should he cut them? The right hon. Gentleman does not believe in lowering prices. He has always believed that he should increase them. That is the whole purpose of the levy system, and that is precisely what will happen. If we have a levy system it will in the end mean a tax on food, and it will harm traditional suppliers who have

supplied foodstuffs to this country for many years. People forget that countries like New Zealand will be harmed by the change. I am not arguing about the Common Market now. I am talking about the Tories' levy policy. In the end traditional suppliers who helped us in time of need, suppliers like Australia, Canada and New Zealand, will be harmed and the consumer will suffer.
I have quoted on a previous occasion a remark the Minister made when he was in opposition and when I was Minister. He played a very active part in opposition, because he feels very much for the industry. I criticise his policy and what he is doing, but I recognise that he has a deep interest in the industry. He has grown up with it. He said:
The time has come when we should have higher prices for food and no subsidies for either the agricultural or the fishing industries. If we did that we would get competition working in both industries and the nation would get better value because the nation has been mollycoddled for too long by receiving cheap food."—[OFFICAL REPORT, 29th July, 1966; Vol. 732, c. 2127.]
That is the right hon. Gentleman's approach, and he will say it again. How could he argue that his Government could reduce prices when he believed that as soon as he was the responsible Minister he would introduce a policy which would raise prices? That is what will happen, and hon. Members know it. That is what the ending of the present system and throwing the burden on to the consumer means.
Moreover, the change will harm many people who now face great difficulties. I think of old-age pensioners and those on fixed incomes.

Miss Joan Hall: Did not prices rise under the Labour Government? Did they stay stable under them?

Mr. Peart: We are not arguing that. The Minister said that they were too low and that he wanted high prices. I can remember what often used to happen when I introduced my Price Reviews. Conservative hon. Members said that I should give more and put more burdens on the consumer. I got into great difficulties. I hope that the hon. Lady will try to understand what a levy system means, as opposed to a deficiency payments system which we have operated for a long period.
The consumers will be affected. Already there is deep, bitter feeling about the matter in the countryside, and those constituencies where there is a fair proportion of agriculture, like Bromsgrove—

Sir Harmar Nicholls: rose—

Mr. Peart: The hon. Gentleman must wait. He knows the position, as a former junior Minister at the Ministry of Agriculture, Fisheries and Food. He knows that that is what a levy system means. The Minister of Agriculture is honest about the matter, because he believes in high prices. Therefore, when the Prime Minister said that he would lower prices at a stroke, he knew that his own Minister could not do so.

Sir Harmar Nicholls: rose—

Mr. Evelyn King: rose—

Mr. Peart: I have given way many times. I believe that hon. Members can make their case.

Sir Harmar Nicholls: rose—

Mr. Peart: I will give way to one hon. Member who I know knows a little about the industry.

Sir Harmar Nicholls: The right hon. Gentleman is adopting an attitude of being fair. He has quoted words used by my right hon. Friend the Minister of Agriculture. If he wants to be fair, why does not he make the quotation complete? My right hon. Friend made it clear that any extra money that might result from the levy would be given back in the form of reduced taxation. That is what the Government have done. Why does not the right hon. Gentleman tell the whole story?

Mr. Peart: I believe that the main argument I put forward is valid, that the Prime Minister made speeches about reducing prices—[Interruption.] The record is there. Everyone in the country believes it. I am saying that the right hon. Gentleman believes in high prices to consumers.
Not only that, but the Government have also destroyed bodies which affect the consumer. [Interruption.] If the

hon. Member for Devizes (Mr. Charles Morrison) wants to make a speech, he should make it standing up. The Consumer Council was abolished. That was a tragedy. The early warning and constant watch procedures have gone. The measure on school meals and milk will inevitably affect milk supplies in the long run. The Milk Marketing Board has made a major statement on this matter. There is no denying that it could have serious effects upon sections of the industry and small dairy farmers in parts of the country represented by many hon. Members present. It is a petty little measure which in the end will harm not only schoolchildren but also sections of the industry.
I should like the Minister to come clean on the value-added tax. There is still uncertainty about it. My Co-op friends, and Members of Parliament of that distinguished group, have made representations to the Chancellor on this matter. My hon. Friend the Member for East Stirlingshire (Mr. Douglas) sent a letter to the Treasury seeking undertakings that food would get relief by a certain measure of exemption if right hon. and hon. Members opposite brought in a value-added tax system, and he has had a reply from the Minister of State.
Despite what has been said by the Chancellor, will the Minister make an unqualified statement that value-added tax will not affect the food of the British people? This is an important matter. I want an answer. So far we have had only equivocation. I want the Minister to give a categorical statement.
We can argue further about the policies operated by the Government. They are policies which will create insecurity in the farming community in the long run, as even farming leaders are now saying publicly. I have copies of their speeches on this very matter. The hon. Member for Torrington (Mr. Peter Mills) represents a farming community and knows that this is true. These views have been expressed at meetings of the National Farmers' Union, and time and again farming leaders have said that there is now a measure of uncertainty not only because of the possibility of our entry into the E.E.C. but also because of the change of that system which, I believe, has worked so well for nearly a quarter of a century.
There is, too, tremendous opposition from the general public to a policy which is adversely affecting the price people will have to pay for food. If the Minister continues in the way that he is, he will one day be regarded as the Minister for mince and margarine, because that is the logic of his policy. We reject it. We said so at the last election. I quote our manifesto:
Unlike the Conservatives, a Labour Government will not be prepared to pay part of the price of entry …
—that is, into the E.E.C.—
… in advance of entry, and irrespective of entry by accepting the policies, on which the Conservative Party are insisting, for levies on food prices, the scrapping of our food subsidies and the introduction of the Value-Added Tax.
It is for that reason that we censure the Government today.

4.14 p.m.

The Minister of Agriculture, Fisheries and Food (Mr. James Prior): I start by welcoming the right hon. Member for Workington (Mr. Peart) back to our agricultural debates after an absence of a year or two. He played a distinguished part in our debates, both when he was previously in Opposition and when he was Minister, and the whole House always enjoys his speeches. I will pick up a great many of his points as I go along, but any that I do not cover will be covered by my hon. Friend the Under-Secretary of State for Home Affairs and Agriculture, Scottish Office (Mr. Alick Buchanan-Smith). I am very grateful to my hon. Friend for stepping into the breach at short notice in the unfortunate absence through illness of my hon. Friend the Parliamentary Secretary. I know that he bitterly regrets being unable to take part in the debate, because for many years he has had a deep interest in agriculture, and he has been performing his job as Parliamentary Secretary with great distinction and great courtesy to all Members of the House.
I start by dealing with food problems and the problems of rising prices. Perhaps towards the end of my speech I can come on to the agricultural implications. Food prices, rises in those prices and inflation strike hard at all sectors of the community. They are of the gravest concern to everyone. Inflation undermines confidence, discourages savings and leads to very serious worries for all

families and for housewives with limited shopping money. I am certain that this is a subject upon which the House should carefully deliberate and I am glad that we have this opportunity today.
I should like to try to analyse what is causing this rapid increase in prices and what we are trying to do about it. First, let us look at our food manufacturing and distributing industries. Are they doing all that they can to contain price rises? Are they efficient? I believe that they are, and I hope that hon. Members opposite share my view. They ought to, because the terms of the recent reports produced by the National Board for Prices and Incomes on the food industry certainly made it clear that the industry is not only operating efficiently but is serving the consumer well in the quality, safety and variety of food that it is providing.
If the manufacturing and distributing industries are not at fault, what then is the cause of increased prices? There can be no doubt that there are two major causes: cost inflation and rising world prices. I shall deal with these two points, but before doing so I turn to the right hon. Gentleman's remarks about "at a stroke" and my remarks in 1966 about food prices.
As the right hon. Gentleman knows only too well, when he talks about "reducing prices at a stroke", this is a complete misrepresentation of what my right hon. Friend said. [HON. MEMBERS: "Oh."] We never promised to reduce prices at a stroke. Indeed, in our manifesto we emphasised that
The Labour Government's policies have unleashed forces which no government could hope to reverse overnight.
What we did say was that the policies outlined in our statement of the 16th June
… would, at a stroke, reduce the rise in prices.
That is the quotation.

Mr. Alfred Morris: What happened?

Mr. Prior: One of the ways of achieving this, as we went on to say, was a reduction in S.E.T. On 5th July S.E.T. will be halved. Many shops have already cut some of their prices. Others will follow suit. It will prevent rises in other cases. It has reduced the rise in prices.


Incidentally, it was the first tax cut affecting prices since 1962. We never told housewives that we would reduce prices. What we did say—

Mr. Gerald Kaufman: Just read what it says in the statement.

Mr. Prior: —was that we would reduce the rise in prices. The record of pledges that we have fulfilled in our first year of office is an outstanding one. Hon. Members should know that my right hon. Friend the Prime Minister keeps his word. [Laughter.] They are much more worried about that than they are about anything else. The Opposition display it. They are a little nervous.
We are told by right hon. and hon. Members opposite that it was this statement that won us the election. This statement was issued on 16th June. From all the noise this afternoon and over the past few months it might be thought that it would have made banner headlines on 17th June. [HON. MEMBERS: "It was."] That is very interesting indeed, because I have just refreshed my memory on this. Three of the nine national daily newspapers—the heavies: The Times and the Financial Times, and the Daily Mail—carried the quote—
Reduce the rise in prices.
In The Times it is carried in precisely three lines on an inside page alongside a very large headline relating to the Prime Minister of the day saying—
Tories seek price rises—Wilson.
In five papers—the Sun, the Sketch, the Daily Express, the Guardian, and the Daily Mirror—there was no reference whatsoever to this statement. The Telegraph mentioned it but did not put in anything about strokes. The Yorkshire Post used
Reduce the rise in prices".
The Glasgow Herald made no reference to it.
This statement has been misrepresented, taken out of context, and taken out of time. It is a typical statement—[HON. MEMBERS: "Yes."]—by yesterday's men who did not read yesterday's papers on 18th June.

Mr. James Johnson: The Minister is a sophisticated

politician. He believes what he is saying, but does he not under-estimate the impact of television upon the public? The housewife saw all this on the television news in addition to seeing it in the newspapers.

Mr. Prior: The hon. Gentleman and his Friends cannot escape from the fact that they tried to blow this up after the election and have now at last been nailed upon it; and they know it.
We were faced with a very serious inflationary problem with wage increases totally out of control. Once the Industrial Relations Bill had been abandoned as a result of union pressure, the unions knew that the Government could not stand against them. The flood gates were open. Wage increases of between 10 per cent. and 20 per cent. started to appear, and by the election double-figure increases were the rule rather than the exception.
This is why we had an election in June. It was the first time this century we had an election in June. It took the right hon. Member for Coventry, East (Mr. Crossman) to let the cat out of the bag. He did it in his usual disarming manner. He said this in a broadcast in April of this year:
The main fact is that we won the 1966 election by choosing the moment of wage inflation before prices had really been felt to rise, and obviously we were seeking to do it again in this election in 1970.
That was the real cat out of the bag. The country was set on an inflationary course from which we have been suffering ever since. This was directly contrary to the Labour Government's considered judgment. Their White Paper—Productivity, Prices and Incomes Policy after 1969; Cmnd. 4237—said this:
If we want price stability, then we cannot all have large increases in pay every year regardless of productivity.
How true this is, but how quickly hon. Members opposite and their friends in the unions seem to have forgotten it.
Wage increases unrelated to productivity do nobody any lasting good, and they can do very real harm to our longer-term economic position if as a result we price ourselves out of the world markets. It is a situation where the weaker lose—the lower-paid workers and those on small fixed incomes, including


pensioners. In the same White Paper the Labour Government said this:
If we want to improve the position of those who are worse off, the rest of us must be prepared to accept a little less ourselves.

Mr. Elystan Morgan: What the Minister says about price increases is very interesting, but which party was it that lathered itself into a fury over the question of doubling the increase for the doctors?

Mr. Prior: It was the right hon. Member for Coventry, East who kept saying that we were in a financially difficult position at a time when the rest of the Government were saying that everything was plain sailing.
Food manufacturers and distributors have been faced with very heavily increased costs, not only in their own wage bills, but in the cost of virtually everything they buy. They have been forced into price increases.
A serious new factor has been gathering momentum. A significant proportion, perhaps between one-third and one-half, of increased costs is due to rises in the world prices of materials which we have to buy from overseas. For these materials the price we have to pay is outside our control and is determined by supply and demand. For many of them world market conditions have been such that prices have risen and have led to increases in retail prices in this country.
Perhaps the most notable example of this is butter. Little more than a year ago—indeed, even in a debate in January of this year—hon. Members were talking about mountains of butter in the Common Market countries and the problem of butter surpluses. Yet now there is a shortage. The measures adopted by the E.E.C. countries to deal with their surpluses, coupled with the effects of drought in the Southern Hemisphere, have transformed the position and there is, as I have said, now a world shortage of butter. The wholesale price of New Zealand butter has, for instance, risen from £300 to £460 a ton—an increase of over 50 per cent.—in just under a year since last June and retail prices have inevitably followed suit.
Nor is this all. There are many other examples. There was the poor harvest in the United States and the onset of blight in the grain crops there last summer

which raised grain prices to nearly record levels. This, in turn, has increased the cost of producing bread and many other articles. It also led to a sharp increase in the cost of animal feeding stuffs, which are by far the largest element in the cost of producing poultry and eggs.

Mr. Peart: The Minister is advancing the reasons for price' increases. His colleagues are always arguing that price increases are due to the rise in workers' wages.

Mr. Prior: I just made that point, but perhaps the right hon. Gentleman was not listening. I made it plain that 30 per cent. to 50 per cent. of the increase is due to raw material costs and that the balance is due directly to wage and cost inflation.
For some commodities hon. Gentlemen opposite must share some of the blame. For example, putting up the guaranteed price for milk in the Price Review of 1970 resulted in the increase in the price of milk last year. The price of home-produced beef, veal and lamb would not be so high if supplies were greater—

Mr. John Golding: Brilliant!

Mr. Prior: —and the main reason that supplies are not greater is because when hon. Gentlemen opposite were in power their agricultural policy failed to provide the right conditions and the necessary degree of confidence.
The right hon. Gentleman talked about the guarantee provided by the 1947 Act and the production which had flowed from it. If he examines the figures he will find that production in 1960 to 1970 was moving ahead at a much slower rate than it did between 1950 and 1960, and that production moved ahead far more slowly in 1965 to 1970 than it did between 1960 and 1965. The truth of the matter is that time and again we have examples of confidence in agriculture declining.
There are now encouraging signs. The tide is turning in our efforts to bring under control the level of wage settlements. While, as I pointed out, we have no control over world commodity prices, we can hope before long that the situation will have eased. These factors, together with the reduction in S.E.T. and the other tax changes, the pressure on nationalised industries to restrain price increases and


so on, all point to a period when the rate of increase in prices will be reduced. [HON. MEMBERS: "When?"] Hon. Gentlemen opposite blame the new import levies for price increases.

Mr. Golding: Not yet.

Mr. Prior: Let us examine the facts. When I announced the schemes in March, I said they would have very little effect on food prices and I estimated their eventual effect at about one half of 1 per cent. This estimate still stands. But, of course, the levies are not even operating yet.
The Opposition have also attacked the Price Review and its effect on the cost of living and the housewife's purse. The only price change in the Review which would in itself significantly affect retail food prices was in that for milk. The percentage of the increase in prices resulting from the last Review and which falls on the housewife is less than in the majority of years of Labour Government. No one likes putting up the price of milk, and it will add ¾ per cent. to the food index, but it is still excellent value for money.
To implicate our policies for what has been happening to food prices is complete and utter nonsense. I reiterate, first, that none of the new levies has come into effect; second, that any increase in price as a result will be very small; and, third, that such effects will be felt only gradually over a period of time.
What would hon. Gentlemen opposite have done had they been in office? The right hon. Gentleman said that he would have kept the Consumer Council and the Prices and Incomes Board, but despite the existence of the P.I.B. a number of food prices under Labour rose very significantly indeed. [Interruption.] In the last five years of Labour Government, the food index rose by 25·9 per cent., whereas under the corresponding years of the last Conservative Government, when we were pursuing policies similar to those we are pursuing now, the cost of food rose by 11·4 per cent., under half the increase during the five years of Labour.
If hon. Gentlemen opposite believe that the existence of the P.I.B. and the

Consumer Council would have been any more effective in keeping down prices than competition, they have no grounds for thinking that. Furthermore, if one looks at the newspapers, one sees virtually every day many signs of vigilance on the part of the Press in picking out any firm or action which leads to a rise in prices. This is far more effective than the old P.I.B. It is this sort of pressure which operates in a free society, and it is far more effective than anything the P.I.B. did. [Interruption.]
It is all very well for hon. Gentlemen opposite to interrupt, but let us examine the record of the P.I.B. In the five and a half years of Labour Government, bread prices were referred to the Board on four occasions, but we had increases in the price of bread totalling 55 per cent. in the space of five and a half years, and the large loaf went up from 1s. l½d. to 1s. 9d., so I advise hon. Gentlemen opposite to keep quite on this issue.

Mrs. Doris Fisher: How much is the large loaf now?

Mr. Prior: I have dealt at some length with the question of food prices because this is obviously a very important issue. Food has to come from the land—[Interruption.]—and I sometimes wonder whether hon. Gentlemen opposite realise that. Certainly their knowledge of agriculture does not suggest that they do.
As I was saying, food has to come from the land. What we do not produce at home we are forced to buy from abroad. It is now good sense, both socially and economically that Britain, with its good climate, rich soil and the most skilled farmers in the world, should produce more of its food at home. Food of high quality at a reasonable price not subject to the fluctuations of world supplies would be of the greatest help to housewives.
It is in the production and marketing of home produce that the real hope of stability and progress really lies. Competition in the shops, better marketing, with greater consideration for what the consumer needs and more home production, is the real hope for the housewife, and this is the cornerstone of our policy.
It is, therefore, with some pride and a real sense of achievement that I come


to the agricultural side of my responsibilities. The right hon. Gentleman talked about a partnership between the Government and agriculture. I want to see that partnership continue and I have good grounds for thinking, as I have gone round the country, that it is working better today that at any time since the war.
It is a very different position from the one I found on taking office. This time last year I found an industry bereft of confidence, seething with discontent, bordering on despair and with no hope in the future, and hon. Member on both sides know that to be true. [Interruption.] The right hon. Gentleman is happy to invite my right hon. Friend to go to Devon, but what happened when his right hon. Friend went to Devon? I have been to Devon. I have been all through the South-West. I know what farmers are saying, and I know that the farming industry is regaining the confidence it lost under the last Government.
We have put a floor in the market and have a solid base for expansion. If hon. Members opposite object to this policy, I hope that they will say so. If they do, perhaps they should read their own White Paper of 1970. Set out at some length in that White Paper are the many measures taken to bring about market stability. It concluded that
They provide a firm base for the stable markets which the Government recognises the industry needs.
There is no great difference of principle between us on the present levy schemes.
The cereals scheme is built on the scheme already in existence but general levies are taking the place of country levies, which makes the scheme far more effective. In our beef scheme, again we are building on the scheme which the right hon. Gentleman was considering. It is most unlikely that any levies will be imposed. Beef prices are at an all-time high, but our scheme would prevent a collapse in the market with all the damage that does to confidence and future supplies. The hon. Member for Erith and Crayford (Mr. Wellbeloved) was quiet about the beef stabilisation scheme then. It is strange how noisy he has become since, although he is not with us at the moment.

Mr. Cledwyn Hughes: The right hon. Gentleman is tending to mislead the House. Will he be good enough to make clear that the stabilisation arrangement he is seeking to negotiate is at a much higher level of levy than I ever contemplated?

Mr. Prior: Of course I do not know the exact figure which the right hon. Gentleman was intending to put on the levy, but the principle is exactly the same and, as I have said, beef prices are high and the objective of both schemes was to prevent the bottom falling out of the market. There is no difference in principle between the two schemes. The main difference between us at the moment is the tariff on lamb which we are putting on and which we consider to be ancillary in a sense to the beef scheme. This is the simplest way to ensure that a reasonably strong market is maintained.
I turn now to milk supplies. I have long believed that we were in danger of getting the price for liquid milk out of line with that used in manufacture. The return on liquid milk under the present system has been about two or three times that for manufacture, and this involves risks. We are trying to ensure reasonable and stable prices for these minor milk products. The right hon. Gentleman mentioned the abolition of some school milk and welfare milk. It is too early to assess the effect of the cut in welfare milk, but he will be pleased to know that last month liquid sales were an all-time record. That is indeed an encouraging picture and it owes a great deal to the very skilful publicity campaign which the Milk Marketing Board has run.
The result of all these schemes will be to restrict Exchequer liability and to allow the market to influence the shape of production and the return the industry receives. It is quite clear that the Opposition when in Government were doing much the same thing. The long-term aims of our policy are to provide more of our needs from our own farms. Only in this way can we protect our housewives from the fluctuating supplies and prices in a world market which has lately shown itself to be highly unreliable.
The solution to our problems must lie in greater home production, and this requires confidence in the future and a


system which does not depend on the Exchequer—a system which frees the industry from the Government's purse strings. If ever one wanted evidence of this one, has been able to see it for the last five years. If the industry had been allowed to expand in the years from 1964 to 1970, we would have produced more food at home and we would not have been in the mess we are in now.
The fact is that the last Government were never able to give to the industry the support that it deserves because they could not find the subsidies to pay. That is why we have changed the policy. There is no doctrinaire reason for doing so. We have done it because we believe that this is the best way of serving the agricultural industry and helping the housewives.
I believe in the agricultural industry. I believe that the farmers, the farm workers and the advisory services—all those who have served our industry since the war—have done a magnificent job. If other industries and other people had done as well for the country as the agricultural industry has done, we would not be in the mess we have got into in the last few years.

Mr. Cledwyn Hughes: The right hon. Gentleman has stressed his belief in expansion. As he knows, we believe in a measure of expansion. He has also referred to the importance of milk production for manufacturing purposes. In view of that importance, will he tell us by what amount he believes the production of cheese and butter should be increased? What plan has he for cheese and butter?

Mr. Prior: As the right hon. Gentleman knows, it will take some years now before there can be much increase in the production of milk, but we are in a position now to have some increase and when the right time comes for making further forecasts of what that production will be, I will do so.
The right hon. Gentleman has told us how his Government believed in agricultural expansion. I will quote the figures for the annual increases in production. I will give them for five-year periods. From 1955 to 1960, the average annual increase was 4 per cent.; from

1960 to 1965, it was 2·6 per cent.; from 1965 to 1970, it was 1·9 per cent.

Mr. Thomas Swain (Derbyshire, NorthEast): rose—

Mr. Prior: No. I have given way a good deal. Those figures for the five-year periods show a decline. I will give now the figures for six-year periods.

Mr. Swain: rose—

Mr. Prior: No. I have given way a great deal. I want to get on.

Mr. Swain: rose—

Mr. Prior: In the six-year period 1958–64, output increased by 5·2 per cent.; in the six-year period 1965–70, it increased by 1·6 per cent. These are the figures and they show why we believe that a change in the system was necessary if agriculture was to achieve its purpose.

Mr. Swain: rose—

Mr. Dennis Skinner: Give way to a farmer.

Mr. Swain: It is widely believed that I am a miners' M.P., but I have the biggest Midlands branch of the N.F.U. in my constituency. Does not the right hon. Gentleman agree that, with the progress in mechanisation on the land, equally as with other industries, inevitably the rate of production increase per year has to level out at some time?

Mr. Prior: I can tell the hon. Gentleman with absolute assurance that provided the agricultural industry is given the opportunity and the incentive it can greatly increase its production, and it will. What it has lacked for too many years is the opportunity, the confidence and the incentive to do so. I hope the hon. Gentleman will return to his large agricultural area and tell the farmers that.
In the 1971 Price Review we were able to give the industry encouragement and to get it moving again. I want to quote one series of figures which all hon. and right hon. Gentlemen will be pleased to hear. They concern the farm capital grant scheme which came into operation on 1st January, 1971. It is wider than the old scheme so comparisons are not exact but the number of approvals in the first three months of this year was


20,000 whereas in the first three months of 1970 it was 13,000. The value of the work approved has gone up from under £12 million to over £24 million.
I can tell hon. Gentlemen opposite, and I speak with some authority here, that farmers do not invest in agriculture unless they have confidence in the future. The fact that they are now investing means that they are confident—

Mr. James Johnson: What about fish?

Mr. Skinner: And peaches?

Mr. Prior: That is why we have used this system of agricultural support to restore the industry's confidence and set it on the right road. We have taken the first steps, long steps at that, towards the introduction of new support arrangements. It is not so much the reduction of imports which will strengthen the market, but the elimination of those which were sporadic and unpredictable. It is those imports which have ruined the agricultural industry for many years. We have made it clear that we intend to carry out the change-over wholeheartedly but that we will spread the process over at least three years.
Naturally there are many difficulties. I cannot control, nor pretend to control, world prices. I can with confidence encourage agriculture to take on a much larger share of the market. This, together with the control of inflation, is the best way to help the housewife. Our policies are the right policies and for that reason I know that they will succeed.

4.53 p.m.

Mr. Terry Davis: On making my first speech in this House, I think that all hon. Members will appreciate that my pleasure is tinged with some sadness at the cause of the by-election which has led to my presence in this House. My predecessor was Mr. James Dance, who represented the constituency of Bromsgrove for 16 years. He was much respected in his constituency and well known for his courtesy. He was always as courteous to his opponents, to those who disagreed with him most strongly about matters of party politics, as he was to his supporters. He was always as helpful to his opponents as he was to his friends.
I well remember the last occasion on which I saw Mr. James Dance, which was

on the night of the General Election last year. We watched together as the votes were being counted. On that occasion his majority was trebled. He had already said that it would be the last time he would stand for the constituency, and his increased majority was the climax of his political career. It is therefore very sad that he did not live more than a year to enjoy the satisfaction of his victory. He was gracious in triumph and courteous to his defeated opponent. I much appreciated the gestures which Mr. Dance made on that occasion. Throughout his political career he sought, as did his wife, only to serve the people of Bromsgrove and Redditch, and in that aim of service I shall try to follow Mr. Dance's example.
It is an honour to represent Bromsgrove and Redditch because in this constituency we have a microcosm of the country as a whole. Brosmgrove is an old market town which now has a large engineering factory, while Redditch is an old industrial town, the centre for springs and needles, which has now been developed and is still being developed as a new town. We have all the problems which that entails both for the new residents as well as the old residents. Many young people are moving into the new town to make their homes there and the arrival of these young families has made even more acute several existing problems in the town. We have been pressing for many years for a new hospital, and the arrival of these young families has increased the need. Mr. James Dance gave active support to an all-party campaign for a new hospital, and I warn the Government that I shall be equally persistent until we obtain this hospital.
We also have a rural district, in which I have the pleasure to live. This rural district contains a vital green belt which separates the towns of Bromsgrove and Redditch from the city of Birmingham and the West Midlands conurbation. Mr. Dance was tireless in his efforts to maintain that green belt, and I shall follow his example in that endeavour.
Bromsgrove and Redditch are also typical of the rest of the country in having both agriculture and industry. We are directly affected by the motor industry, as is much of the West Midlands. Many people living in Bromsgrove, Redditch and the surrounding countryside are drawn into the motor industry. We have a large Austin factory, part of the British


Leyland Group, within the constituency. Many other people commute to the city of Birmingham, as I did before my election to this House.
So we are typical, and it is because we are so representative that the result of the by-election in Bromsgrove was so significant. The issues in that by-election were not local issues. They were national issues. The debate was dominated by two matters—unemployment and the cost of living. This afternoon I will not ask for the indulgence of the House while I talk about the phenomenon of rising unemployment in the West Midlands. Nor do I intend to talk about many aspects of the cost of living which were the subject of debate in the by-election campaign. We discussed mortgage rates, the rents of council houses and the rents of houses in the new town, prescription charges, bus fares and school meals. All these matters are very important, but if one question above all others was discussed, it was the increase in the price of food. I do not intend to enter into the argument about what the Prime Minister did or did not say last June, or what he intended to say then. I do not think it can be denied that the people of Bromsgrove and Redditch thought, rightly or wrongly, that this Government would take action to reduce the rise in prices.
It cannot be denied, and it has not been denied by the Minister today, that food prices have risen more rapidly during the past year than during the last year of the Labour Government. I wish that the Minister of Agriculture had given the statistics, because they were notably absent from his speech. The rise in food prices has been more rapid under the Conservative Government than under the Labour Government. These prices are continuing to rise more rapidly, and this situation will continue. We have no less an authority than the Minister of Agriculture for this belief because he came to Bromsgrove during the election. He came to the village where I live and he told us that there would be further significant increases in the price of food during the next few months.
He said then, as he said today, that a major part of the reason was to do with inflationary wage settlements, increases which were in excess of the increase in productivity. What no spokesman for the

Conservative Government has told the House, the country or the people of Bromsgrove in particular, is who has had these inflationary wage increases which have affected the price of food. Is it the agricultural workers? Is it the people who work in the factories to prepare and process food? Or is it the men who drive the lorries and distribute the food? Is it the shop assistants who have had these inflationary wage increases? I hope that the Minister who is to wind up the debate for the Government will answer this point and tell us who is responsible for these inflationary wage increases which are affecting the price of food.
The major part of the Government's case appears to rest on a reduction in S.E.T. Again, it cannot be denied that during the election last year it was said that the Government would reduce S.E.T. and that this would have an effect on rising prices. The Prime Minister last week went further and told us, in answer to a supplementary question from myself, that a reduction in S.E.T. had already reduced prices and would reduce them still further after 5th July. I accept at once that the Prime Minister was referring to prices in general and not to food prices in particular. I also accept that he was talking about some prices and not all prices.
Again I ask the Government to tell us what has been the effect of the reduction in S.E.T. Surely they must be able to tell us by how much the reduction in S.E.T. has reduced the rise in prices, and by how much the reduction in S.E.T. will reduce the rise in prices still further after 5th July. These are the questions which, when I returned to my constituency at the weekend, people were asking me, because in Bromsgrove and Redditch people cannot see the effect of the reduction of S.E.T.
A year ago the Prime Minister made an important speech, which he will recognise however much it may be said to have been misquoted. He said that he had an alternative economic policy, which was to break into the price/wage spiral by acting directly to reduce prices. He said:
This can be done by reducing those taxes which bear directly on prices and costs, such as selective employment tax, and by taking a firm grip on public sector prices.


I ask the House to note that the Prime Minister referred to selective employment tax only as an example. This was only one of the actions that the Conservative Government would take. In Bromsgrove and Redditch, people are asking what else the Government have done to reduce the rise in prices, because they cannot see it. Their conclusion is the same as mine, that the Government have done nothing, except to reduce S.E.T., to have any effect at all on the rise in prices.
I do not want the Minister of Agriculture to be under any misapprehension. Whatever happens when the House votes tonight, the Motion of censure has already been passed on the Government. It was passed by the people of Bromsgrove and Redditch on a date which will be remembered in my constituency for many years—27th May, 1971.

5.3 p.m.

Mr. Peter Mills: It is my pleasant task to congratulate the hon. Member for Bromsgrove (Mr. Terry Davis) on his maiden speech. The hon. Gentleman made an excellent speech, which was most interesting, and he was very gracious in the way in which he referred to his predecessor. We look forward to hearing the hon. Member again.
This is the first opportunity we have had for a full-scale debate on agriculture for a long time. There is much that needs to be seen to, and I should welcome a more frequent opportunity to debate agriculture.
The right hon. Member for Workington (Mr. Peart) is a little out of touch. He has got very rusty since he last spoke on agriculture, and he was not up to his usual form. He should have been more positive about how Labour would help agriculture and the consumer. What alternative has the Labour Party? In saying that agriculture will change, the right hon. Gentleman was right. There are new circumstances which demand new policies to give British agriculture the chance to expand. Many of us are dissatisfied with the past policies, not only of the Socialist Administration but of previous Conservative Administrations. If agriculture is to play its part, it must have new policies, and the Government have had the courage to introduce those new policies.
Agriculture was in a straitjacket and suffered in many ways from restrictions. The more we produced, the less we got for our end product, and that does not help expansion. We suffered under the previous Administration, although I am grateful for their attempt to help with the problem of imports. But they did not go far enough. Much more needed to be done to control imports, and the Conservative Government had had the courage to start this process.

Mr. Peart: Will the hon. Gentleman tell me whether he would control European imports?

Mr. Mills: It is quite unnecessary to make a remark like that, which has nothing at all to do with this debate. Anyway, the right hon. Gentleman docs not know whether I am for or against our going into the Common Market. It would be interesting to know what are the right hon. Gentleman's views on that subject.
Is the right hon. Member saying that there is no need to change the policies of the Socialist Government and that what they did is satisfactory for meeting present needs, bearing in mind the world food shortage? That is not what the consumer wants and it is not what agriculture wants. The consumer wants more home production, and agriculture wants to play its part in producing more food. Therefore, we should change our policies to meet the new circumstances. The right hon. Gentleman was wrong to criticise the Government without saying what he would do. Our policies are absolutely right and are in line with what the country demands.
The question of food prices is not easy, but we must grasp the nettle. I openly said in my election address and pamphlet that food prices would go up, and that it was in the interests of consumers that they should; otherwise, we should be at the mercy of imports from abroad, and the consumer would have to pay even more for food. It is therefore right that producers should get a fair return and so, in the long run, protect the consumer. Admittedly, food prices have risen more than I or anyone else would like, because of the world shortage of some commodities. It is dishonest for the right hon. Gentleman to


brush aside the world increase of £8 or £9 a ton in cereals. It is dishonest for him to brush aside the shortage of butter in New Zealand and Australia, and the world shortage of beef.
We must admit that when we got into power we did not realise that there would be this sharp increase in world prices—let us be honest about it. With respect to the right hon. Member for Workington, he was not being honest about it and, on reflection, he will realise that he should have acknowledged that world prices have risen and that that is beyond the control of any Government, Socialist or Conservative. World prices have risen because of a world shortage of food and because of increases in wages.
The hon. Member for Bromsgrove (Mr. Terry Davis) asked which agricultural wages had gone up. Certainly the cost of a tractor and all the machine parts used in agriculture are affected by wage increases in industry, and that applies to spares, fertiliser, transport; and all these have contributed to the rise in the cost of food. And then there is legislation itself. Opposition Members cannot wriggle out of this because it was Socialist legislation that caused many food prices to go up.

Mr. Cledwyn Hughes: indicated dissent.

Mr. Mills: It is no good the right hon. Member for Anglesey (Mr. Cledwyn Hughes) shaking his head. We had to sit through wearing debates discussing Socialist policies which we know in the long run would force up the price of food. The Labour Party must bear the blame.
I tremble to think what would have been the effect on food prices if a Socialist Government had regained power. It would not be about 10 per cent., but would far more likely amount to an increase of 20 per cent. [HON. MEMBERS: "No."] Yes, that is what would have happened had the Labour Government carried on in their doctrinaire way and done nothing to encourage agriculture and to restore confidence in the industry. This is what would have happened had they continued with all their other policies, involving high taxation and various other matters and the cost of food would have risen considerably higher.
Our policies, on the other hand, have been designed to give farmers a better

return and, in the long run, are aimed at safeguarding consumers. But, as I have said, world prices have risen rapidly and Socialist legislation and wage increases have all contributed to the rise in the cost of food.
The present situation in agriculture is one of confidence. There has been a remarkable and dramatic change—if one likes, at a stroke. The present Minister has brought back confidence to British agriculture. This is something that the right hon. Members for Workington and Anglesey never did. They glibly speak about coming to the West Country again. They certainly had a rough trip last time. However, the welcome my right hon. Friend received in the West Country the other day was entirely different, because farmers feel that confidence has been restored.
I ask myself what would have been the position had the Labour Party been returned to power? Confidence would have been completely lost. Indeed, such confidence as existed had almost evaporated when the election came along, and production would have gone down even further had the Labour Party been put back in office.
We all know the sorry story of beef production, and we must do something about it. Beef production today is less than it was in 1964. What is the Socialist record on beef? They left an industry short of capital, with high interest rates and with land prices dropping. They left behind them a system of high taxation, less freedom and more control. All this would have added up to complete stagnation in agriculture and many farmers would have gone out of business. More farms were up for sale in the last year of Socialist Government than ever before, as anybody knows who visited the West Country at that time. All this was as a result of Socialist policies on agriculture. This was the stagnation we faced and all this has contributed to higher prices.

Mr. Cledwyn Hughes: I did not want to interrupt the hon. Member's extravaganza, but I thought I should intervene to correct him on one point. The average figure for beef and veal production for 1960–61 was 850,000 tons. The forecast for 1970–71 was 963,000 tons, which was


a progressive improvement as a result of the Labour Government.

Mr. Mills: I was talking about the figure in 1964.

Mr. Cledwyn Hughes: The hon. Gentleman is selecting his figures.

Mr. Mills: I have had the courrage to say that the present Government would have to do something about the situation, since it is a fact that beef production is not high enough and that we are not producing any more now than we did in 1964. However, confidence has returned and we have got away from the awful stagnation which existed earlier.

Mr. Peart: The hon. Member should not continue on those lines. He has been arguing against my main case about the confidence created by the existence of the 1947 and 1957 Acts. I will quote Henry Plumb, the N.F.U. President, when he was speaking to the Royal Society of Arts quite recently:
Earlier on I mentioned that the increase in economic efficiency has been brought about largely by the farmers' own efforts. They invested because they had confidence in the future. The existence of the Agriculture Acts of 1947 and 1957, with their provisions of assured markets and guaranteed prices, determined annually after consultation with the industry, was an important contributory factor in engendering this confidence.

Mr. Mills: "Was" is the word for it. It only goes to prove how out of touch is the right hon. Gentleman.

Mr. Peart: No. It is the hon. Member himself who is misleading the House.

Mr. Mills: The right hon. Gentleman wants to go round the country and listen to what the farmers are saying; and he wants to listen to what the President of the N.F.U. is saying today. Confidence is there. Most farmers endorse our policy of import control to give British agriculture a larger share of the market.
I wish to close by saying a few words about the future. Although we had a good Price Review this year, I hope that my right hon. Friend will be extremely flexible in the months and years ahead. He is moving away from a once-a-year look at British agriculture. We need to look constantly at the situation and to adjust our policies to meet changing needs and demands. I hope that my right

hon. Friend will make adjustments as problems arise and in anticipation of the difficulties and problems.
I will give two illustrations of two areas at which he should look. I hope that he will examine the difficulties which are being experienced in pig production. The situation there needs careful watching and requires a flexible mind. Secondly. I hope he will look carefully at the working of M.I.P.s, particularly in regard to the harvesting of cereals. It is feared that there could be problems with heavy production. I believe that my right hon. Friend will adjust policies to meet these difficulties in the interests of agriculture and the consumer.
I also hope that my right hon. Friend will look carefully at the production of lamb. I am not satisfied, nor is my right hon. Friend, I am sure, with our lamb production. Much more needs to be done to get lamb production going again to meet the needs of the consumer, to help agriculture, to improve fertility, and so on. The production of lamb and mutton is vital to the consumer.
I hope that he will also have a flexible mind about marketing. There is a great need for better marketing and organisation. Farmers desire to do very much more in a way of marketing and wish to organise themselves in more efficient ways. I hope that my right hon. Friend will give every encouragement to what they are trying to do and I hope that he will seek to guide them.
I hope, too, that my right hon. Friend will look carefully at our costs. I know that he does already, but I have in mind especially our machinery costs. I am appalled at the way in which tractor costs have risen in the last year. In a way, I am delighted that tractor manufacturers have stacks of tractors in their yards and that agricultural merchants and engineers cannot sell them. They are far too highly priced, and they are too complicated. British agriculture needs a simple tractor to meet its requirements, and at a reasonable price. It is my belief that some manufacturers have taken advantage of the present inflationary situation. Costs are far too high. I hope that my hon. Friend will watch them very carefully.

Mr. Peter Emery: Does not it further my hon. Friend's argument to


remind hon. Members that what is so very relevant is the fact that, because of its high machinery prices, agriculture has had to bear the cost of many industrial wage claims? It is those outside wage claims which are pushing up agricultural costs, though not many people outside agriculture realise it.

Mr. Mills: That is quite correct, and I am certain that my right hon. Friend has listened to my hon. Friend's comment.
I believe passionately that the consumer, who is the all-important person, will benefit from an expanding British agriculture. This Government are trying to see that that happens. I hope that they will succeed. A change was needed in our policies towards British agriculture. In the long run, a healthy and prosperous agriculture protects the British consumer, who must never again be allowed to be at the mercy of imports.

5.23 p.m.

Mr. Elysfan Morgan: I am sure that the hon. Member for Torrington (Mr. Peter Mills) will forgive me if I do not elaborate on the points that he made, save to say that the first part of his speech would have been more appropriately delivered in this House before 1846, when the Corn Laws were abolished. That was exactly the reactionary argument that he was putting.
I hope that the hon. Gentleman will forgive me if, instead, I turn to the Minister's speech. I found it very entertaining, though most of its humour was unconscious. I cannot help feeling that the Prime Minister's case and that of his party was not greatly strengthened by the right hon. Gentleman's contribution today.
I remember some years ago hearing a judge tell a brash and inexperienced counsel who had just completed a plea in mitigation on behalf of his client on a very serious charge, "Before I heard your plea in mitigation, I was disposed to take a lenient view of this case. I am afraid that I no longer have that liberty". The same was true of the Minister's defence.
Whatever the headlines in British newspapers were on 17th June last year, no one can gainsay the fact that the whole tenor of the Conservative Party's campaign was to suggest that, if they were

returned to Government, they held a talisman which would enable them to bring about a miraculous change in terms of both existing price levels and future increases. Even taking the most charitable view possible of the Conservative Party's case and accepting that, as the right hon. Gentleman now claims, it was talking about only price increases, the fact remains that prices have increased by 100 per cent. over the annual average of the five years preceding. The right hon. Gentleman gave us figures ranging over a period of 10 to 15 years, with one significant omission. He did not say what had happened in the last 12 months, which have seen an increase of 10 per cent. in the price of food.
The Government made a gallant attempt at the price review this year to claim that they had injected adequate resources into British agriculture. No doubt £138 million is a substantial sum. However, all these matters are relevant, and no review can be considered in vacuo. A review must be considered against the total of costs that have increased in the previous 12 months. In that 12 months, there has been a record increase in costs, to a total of £217 million for all agricultural commodities, and a figure of £141 million for review commodities. Those figures speak eloquently for themselves, and it is right that we should contend, as I do now, that the position of British agriculture immediately following the review of 1971 was considerably worse than it was following the review of 1970. For all that the Minister says about confidence, that is the official view of the National Farmers' Union.
The question comes to mind, what increases in costs have occurred since the review? I hope very much that the Under-Secretary of State for Home Affairs and Agriculture, Scottish Office, will give us the fullest details on that point. These matters must be known to the Minister from month to month. They are not handed to him as an oracular Civil Service revelation shortly before each year's review.
I am sure that British farmers will regard the year 1971 as the year of the hatchet, when, amongst other matters, the advisory services were severely mauled. No doubt the Minister takes pride in having acted in accordance with


the rigorous canons of the Conservative Party's doctrine which has resulted in Rolls-Royce ruthlessness being applied to British farming. I think that time will prove that, in this context, the Government have acted in a mean, short-sighted and unintelligent manner.
In dismembering the advisory services, the Government have terminated the very fruitful partnership which existed between farmer and adviser. In doing that, the right hon. Gentleman and the Government have acted in a way which must be detrimental to the initiatives of agriculture generally. They have brought about as serious a loss of morale among our farmers as they have among those who have given loyal service to British agriculture as advisers.
I want briefly to refer to the Minister's attitude to the problems which confront British agriculture in the event of our entering the European Economic Community. It is strange that the Minister should have spoken for about three-quarters of an hour without mentioning the E.E.C I doubt whether such a performance would have been possible in the Parliament of any of the member countries immediately preceding the signing of the Treaty of Rome. If the point were put to people in any other country, they would think that we, on the eve of this fateful decision, were taking part in a Mad Hatter's parliamentary tea party.
Beside the massive issue of British entry into the Community, all other agricultural problems appear to be insignificant. All these situations could be subsumed by that one central, all-dominating consideration. We are thinking of nothing less than bartering the certain stability of a tried and proven system for a new system which is redolent with imponderables and which was never designed for the conditions of a community such as ours.
The Minister's candour is in inverse ratio to the complexity and significance of the issue. The National Farmers' Union made a statement on 17th June on this very matter. It said:
As from the outset the Government has accepted the common agricultural policy to the extent of its development so far, the prospects for British producers will depend to a large degree on the methods by which the principle of Community preference is applied to each of the relevant commodities. On these and

other matters the Government must give firm undertakings to consult the representatives of the Unions both before and during the exploration of the issues in depth in Brussels.
It is not merely a question of consulting the unions; it is a question of being fair, honest and open with the farmers of this country and with the House of Commons.
It may be that the Minister, like his colleagues, takes the cynical and patrician view that these matters are too serious to be in the contemplation of the people whose lives are radically affected by them.
The Minister was for many years the Parliamentary Private Secretary to the right hon. Member for Bexley (Mr. Heath). He must now forget his previous incarnation. He is no longer the parliamentary whippet following at the heels of his master; he is in control of the destinies of the biggest single industry in Britain.

Mr. Jerry Wiggin: And doing it very well.

Mr. Hector Monro (The Lord Commissioner to the Treasury): The hon. Member for Cardigan (Mr. Elystan Morgan) is spoiling it now.

Mr. Morgan: I am glad to hear a Scottish voice in the debate.
Some of the most important questions in this connection refer particularly to milk producers. A central question is whether the Milk Marketing Board will continue with its present functions and powers or whether its powers will be emascalated and its functions truncated. The significance of the Milk Marketing Board, particularly the maintenance of a fairly uniform price for milk throughout the United Kingdom, was brought home to many of us two years ago when the Padfield case was heard.
I represent the county of Cardiganshire, an area where only 24 per cent. of the milk produced is sold within its boundaries. The other 76 per cent. is sent outside. If it were necessary for the producers to bear transport costs—the producers of Cardiganshire are eternally grateful to my right hon. Friend the Member for Anglesey (Mr. Cledwyn Hughes) for his decision—their production costs would be increased by about 3p to 4p a gallon. It is no exaggeration


to say that probably half of them would be driven out of business.
Will the Minister give an unreserved solemn guarantee on that issue? Has he considered it? Has he negotiated on this matter? If so, with what result? When will he tell our milk producers what the situation is?
There is also the question of milk products. Will the Parliamentary Secretary, who will be replying, tell the House how it is that in the countries of the Six a very much higher percentage of milk goes into the non-liquid market than is the case in Britain? What will the position be if we enter? Will there be any restraints on substantial quantities of milk products coming into Britain? Will Britain be swamped by cheap dried milk and other products? Has the Minister considered those questions? Have there been negotiations, and, if so, with what results?
I turn now to hill farming. As hon. Members appreciate, no part of agriculture is more closely geared to the grants and subsidy system than hill farming. My fears in this respect are twofold: first, on account of the inherent dangers of the European system and, secondly, on account of the dangerous attitude of the Minister himself.
The Treaty of Rome contains specific general provisions against unfair competition in, I think it is, Article 92. We have been repeatedly told by apologists for the European system that financial resources of great magnitude are poured into the under-developed areas of Europe. I have checked on those figures in the last few weeks. I find that in total they do not amount to the purse of Fortunatus.
In France, for example, the average annual expenditure on regional policies over the last five years has been about one-seventh of the sum spent annually by the British Government up to the summer of last year.
I turn now to the Minister's views. The House will remember that on 6th May, when we had a debate on the extinction of the Pennines Rural Development Board, the Minister said:
I am prepared to go into any hill area in the country and put before the farmers there the question whether they prefer to stand

on their own feet with a higher end price. I have had plenty of opportunities to do so, and the right hon. Member for Workington (Mr. Peart) may go with me if he wishes.
I have been to the Pennines and put this to the farmers. I am convinced that in these areas we have some able, independent and study people who do not want a situation in which they are constantly supported by boards and subsidies."—[OFFICIAL REPORT, 6th May, 1971; Vol. 816, c. 1803–4.]
The right hon. Gentleman is on record on a number of other occasions as saying that he would do away with subsidies. I believe that this was the first occasion on which he said that that policy would be implemented for hill farmers as well. I am sure that he appreciates that the Select Committee on Agriculture, which reported in 1968, found that 65 per cent. of the net income of hill farmers was represented by grants and subsidies. Hill farming is not an expendable lame duck. About one-third of the agricultural land of the United Kingdom is classified as hill land—18 million acres. From these areas no fewer than 500,000 cattle are sold every year, and about half the sheep retained for breeding come from there. It would be a great tragedy if these localities, vital to the agricultural industry, were to be laid desolate and sterile to satisfy the paranoic hatred of the Tories towards Government aid and planning.
It would be utterly monstrous if the necessary support for these areas were to be hacked away when at the same time we were laying British people open to the payment of a vast annual tribute to support the gross inefficiency of farmers on the other side of the Channel. The extract from the O.E.C.D. Report quoted by my right hon. Friend the Member for Workington affords incontrovertible proof of this point. The Minister does not seem to have any sympathy for upland farmers. I wonder what his attitude is towards the small farmers.

Mr. Prior: The hon. Gentleman has absolutely no justification for that or a good many other remarks which he has made this afternoon. I have never said that the hill sheep or hill cow subsidies are to go. The hon. Gentleman knows that I have not said that. He also knows that I have gone out of my way to reassure the hill farming community. I hope that he will withdraw his totally unwarranted remarks.

Mr. Elystan Morgan: It is not my habit in this House to seek to misrepresent right hon. or hon. Gentlemen opposite. But how could I take any other attitude towards the right hon. Gentleman's policies when I have heard him say that those people
do not want a situation in which they are constantly supported by boards and subsidies"?
Those words were offered in general terms. If the Minister now seeks to create an exemption and reservation, it is for him to say so and, he having said it, I accept it, but it is only now that he has seen fit to limit the wide generality of the words that he used.
Perhaps the Minister would say something about small farmers. What view does he take of the Mansholt Plan, that 1968 proposal which dedicated the E.E.C. countries to reducing the agricultural population from the 10 million that it is now to less than five million at the end of 1980? Does the right hon. Gentleman support that? Has he taken part in negotiations on that matter? Is there to be a pro rata reduction of the British agricultural population in the same way, and does the fact that the right hon. Gentleman has seen fit not to go ahead with any small farm schemes give a clue to his policies in that direction?
Perhaps I may make just one more point before concluding what I have to say, and that is about target prices. What studies has the Minister made on the effect of target prices, as opposed to guaranteed prices, upon British agriculture? The right hon. Gentleman appreciates, better than anyone, that the certainty of a price level comprises the main timber of agricultural confidence. What will the situation be if we enter Europe with undulations and fluctuations from time to time, and with wide geographical disparities? Is the right hon. Gentleman happy that farmers will feel confident about investing in the future, even though the certainties of the moment have all been lost?
From time to time there has been pious talk about annual reviews. It is one thing to moot an idea now, while we are free people and a sovereign State. It is another to expect it to be adopted by majority partners in a European association of which we are a small minority

and have only four votes out of 29 in the Council of Ministers.
I shall not take up any more time, because I know that many hon. Members wish to contribute to the debate. The questions that I have asked are simple and honest ones to which British farmers are entitled to receive an answer. We have reached the moment of truth. Let the Minister now speak with candour. There are questions which call for full and honest statements. The patience of the industry is wearing thin, and it is in no mood to tolerate further fatuous banalities and meaningless generalities from the Minister.

5.43 p.m.

Mr. Jerry Wiggin: Before I get involved in agricultural matters may I make two comments which may not be strictly in order, but I am sure that the Chair will not rule against me on that score.
First, much as I look forward to hearing my hon. Friend wind up the debate tonight, I should like to add my feelings to those that have been expressed about the unfortunate illness of my hon. Friend the Member for Edinburgh, West (Mr. Anthony Stodart). I am sure that I speak for the whole House in wishing him a speedy recovery.
Second, may I comment on the kind remarks that have been made about the late Jimmy Dance. In my previous career as a farmer in Worcestershire, I had many dealings with Worcestershire Members of Parliament. If the hon. Member for Bromsgrove (Mr. Terry Davis) can do as much for the farming interests of Worcestershire as his predecessor did, he will, indeed, serve them well.
It must be almost unique that in 12 months the House has not debated agriculture. One hon. Gentleman says that it is our doing. I can only suspect that as the Government have not seen fit to introduce any legislation dealing with agriculture, the Opposition's reluctance to choose this subject to debate on a Supply Day means that perhaps they are not quite so out of touch with the feelings of the country as one might have suspected after hearing the speech of the right hon. Member for Workington (Mr. Peart). The fact is that after 12 months of Conservative rule the country's farmers are a great deal happier than they were in the previous six years.
Confidence is perhaps difficult to define, but there is no doubt in my mind, as I am sure there is none in the minds of those who are in close contact with the farming community, that confidence in the Labour Government was at such a low ebb that bankruptcies threatened more people than we shall ever know, and farms remained on the market unsold for many years. I speak with bitter personal experience of that, and it is only the last price review that has restored confidence.
That Price Review was perhaps one of the best that the country had had for many years. There was recoupment in full, there were no efficiency factors to be taken into account, and it was a review that was welcomed throughout the industry.

Mr. David Clark: If the Price Review was so good, why did the N.F.U. oppose it?

Mr. Wiggin: I think the council took the view that, owing to its own internal political circumstances, of which I claim to have some knowledge, it would have been unwise at that time to have agreed to any review.
Despite its merits, the review only returns the industry to its position in the previous spring when, as I have said, confidence had lapsed, investment was on the downturn, and pressure was on many people who were fighting off bankruptcy almost on a daily basis, and with the present rate of inflation, it will not be very long, regrettably, before we shall need another review as good as the last one. If we are to see agriculture return to its prosperous level of the late 'fifties and early' sixties, there will have to be a substantial injection of capital into it.
1 was once told that a prosperous agricultural industry leads to a prosperous industrial Britain, and I think that if we were to follow that back through history we would find that slumps in farming were frequently followed by slumps in industry. I think that some of our troubles today stem from the drying up of the substantial sums that agriculture pours into the economy. As the hon. Member for Cardigan (Mr. Elystan Morgan) said, agriculture is the largest single industry and, as such, it is one of the largest spenders into our economy.
Capital is the basic requirement, and capital comes basically from profit.

Mr. Cledwyn Hughes: The hon. Gentleman has made a number of extravagant and inaccurate remarks about confidence and investment. If he looks at paragraph 26 of the Government's White Paper of March, 1970, he will see that at that time investment was reasonably satisfactory.

Mr. Wiggin: I do not have the White Paper before me, but I accept the right hon. Gentleman's statement.

Mr. Cledwyn Hughes: The hon. Gentleman should read the White Paper before he makes such comments.

Mr. Wiggin: The factor that is necessary to build up capital investment is an element of profit, and it is clear that even today the profit factors in an industry with such a high risk element as there is in agriculture are still not adequate.
How does the ordinary farmer raise his money? He goes to his merchant, to the bank, or to the Agricultural Mortgage Corporation. Since 1965, he has had to pay record interest rates. Although I do not have my right hon. Friend's complete sympathy in this matter, I hope that he will closely consider, whether or not we enter Europe, the possibility of assisting British agriculture in some way and in some area, possibly by subsidised interest rates.
Hon. Members have talked about support for the hills and so on and it is accepted that, whether or not we go into Europe, there will be substantial assistance, up to about £150 million, in capital structure grants, drainage schemes and so on. It is possible that we could look at the possibility of assisting interest rates. If we took, say, a 5 per cent. assistance on bank overdrafts, that would cost about £25 million a year—not a substantial sum in proportion to the whole figure, but it would give enormous assistance to those who need it most.
I have here the report of the O.E.C.D., "Capital and Finance in Agriculture". Vol. 1, 1970, which says:
Agricultural credit has not escaped the general increase in interest rates which has occurred in all countries in recent years. This increase has given rise to particularly difficult problems for agriculture, as the level of profitability often makes it difficult to meet such


rates of interest and as agriculture cannot easily pass on higher rates through the prices of its products.
The report goes on:
In certain countries … the agricultural credit system is mainly subject to market forces"—
as it is in the United Kingdom—
in particular as regards the level of interest rates, but in other countries the State provides financial assistance to the agricultural credit system in order to ease the position of credit. This aid may take various forms …
I know that Belgium, France, Sweden, Greece, Portugal, The Netherlands, Turkey, Finland, the United States, Switzerland and Denmark, among many others, give assistance of this sort to their farmers.
It is clearly impossible to discuss these things without considering our entry to the E.E.C. I have not committed myself to voting either way on this issue, but I believe that the producers of corn, beef, milk, sheep and pigs will have nothing to fear in a new Community. Horticulture, of course, will take a great blow, but the N.F.U. should come clean about ordinary farmers. If one section of the community will profit, it is they.
As I said, a prosperous agriculture should lead to a prosperous Britain, and if I am to weigh up this matter, that would go in the scales in favour of entry. But I am far from satisfied that the common agricultural policy is yet working satisfactorily. British farmers, fortunately, have not had much practice in demonstrating—although the last Government gave them some excuse. When 100,000 people gather in Brussels to riot against the c.a.p., one is bound to question whether it is working as satisfactorily as had been hoped.
Whether or not we go in, my right hon. Friend is quite right to introduce a levy system. His predecessor as shadow spokesman on agriculture, my right hon. Friend the Member for Grantham (Mr. Godber), worked very hard in his years of opposition to ensure that we got this policy right. I believe that we have. Introducing it for beef and corn at present, when world prices are higher than they have been for many years and higher than the levy price, means that we shall not disrupt the whole of our system.
I agree that these levies must be kept under constant review. Nothing is more

important than that. When one is planning a farm year, an annual review can upset the whole balance of one's prices by the stroke of a Government's pen. This shows how difficult it is to plan properly.
The right hon. Member for Workington spoke about the merit of the subsidy system, yet he knows that, during the last harvest, when the price of imported barley went above the guaranteed price, thus meaning that the deficiency payment will probably not be paid on last season's harvest, many hundreds of thousands of pounds were lost by British farmers—but they were lost by those who had planned their marketing properly, who had contracted forward and done the very things which we were told had to be done.
I know of one organisation which is marketing co-operatively the produce of more than 6,000 acres which has had to tell the co-operators that they lost more than £30,000 last season alone. That could not have happened under the levy ssytem unless we had over-produced on the home market, when, of course, proper market intelligence and planning would have overcome the difficulty.
Turning from corn to livestock, I want to comment on the Minister's announcement last week on the reorganisation of sire licensing. This is the first opportunity which the House has had to discuss it. I welcome the Minister's decision to abolish the licensing system for boars. There is no doubt that boar meat contains a substantial taint. I am certain that our producers will be aware of that and that our pig factories will take note to reject animals which are slaughtered without having been cut.
But why does my right hon. Friend stop there? Why has he given in on the question of licensing bulls? Does he seriously think that it is necessary in this day and age to judge an animal solely on its appearance? Why cannot he not just tear up the rules as he has for boars? It cost £55 per head to reject every bull under the scheme last year. I would have thought that, with the modern educational standards in our farming community, with the A.I. facilities which are available all over the country, we could now be allowed to manage these things without help from the Government.
I repeat what I said at the start. In spite of interruption by the former Minister of Agriculture, confidence in British agriculture is coming back and will go on coming back. If my right hon. Friend can go on at the rate at which he has started, I look forward to seeing the industry return to the healthy state in which it was when the Conservatives left office in 1964.

5.58 p.m.

Mr. Alfred Morris: We heard a deeply felicitous maiden speech from my hon. Friend the Member for Bromsgrove (Mr. Terry Davis). As he said, his very presence here sheds some light on the total lack of success of the Government's policies.
It has been somewhat unkindly said of the right hon. Gentleman's speech that it was a speech of unconscious humour. I do not think that he meant to be so funny. Certainly, his explanation of the propaganda in which he and the Prime Minister indulged just before the election was anything but convincing. Everyone accepts that the Prime Miinster gave a clear undertaking to control the increase in prices.

Mr. William Molloy: Is my hon. Friend being fair to the Minister in view of his endeavours to make amends for the Prime Minister's misleading statements? From his authoritative position—having been the Prime Minister's P.P.S., he obviously had some doubts about his right hon. Friend's promise to control prices—he told the nation over the radio a few weeks ago that he hoped that the British housewife did not really believe what the Prime Minister had said. In fact, he was confirming that his right hon. Friend had pulled one of the most grievous con tricks ever perpetrated in British politics.

Mr. Morris: My hon. Friend is being somewhat charitable to the Minister over his recent B.B.C. statement. There are others who regarded it as deeply cynical, for the right hon. Gentleman was, in effect, saying that nobody should have believed a word the Prime Minister said in his celebrated statement of 16th June, 1970. There are some who take the view that the right hon. Gentleman's B.B.C. statement should, for its unequalled degree of cynicism, qualify for inclusion

in the Guinness Book of Records. Having led the public into believing that the Conservatives would control and stabilise prices at a stroke, they have been responsible for the biggest-ever increase in prices.
I have a further charge to level against hon. Gentlemen opposite. They have deliberately set out to increase prices—[HON. MEMBERS: "Rubbish"]—and I make no apology for harking back to the Minister's statement of 29th July, 1966, when, speaking as a member of the then Opposition, he said:
The time has come when we should have higher prices for food and no subsidies for either the agricultural or fishing industries. If we did that we would get competition working in both industries and the nation would get better value because the nation has been mollycoddled for too long by receiving cheap food".—[OFFICIAL REPORT, 29th July, 1966; Vol. 732. c. 2127.]
That is why I said there was some cynicism in the right hon. Gentleman's recent statement. He was really telling British housewives to read the Prime Minister's statement of 18th June, 1970, in conjunction with his own statement of 29th July, 1966.
We know the Minister to be an old opponent of the cheap food policy. He is a declared antagonist of lower prices. His speech today was not persuasive, whereas the speech of my right hon. Friend the Member for Workington (Mr. Peart) was powerful and persuasive. [HON. MEMBERS: "Rubbish."] Hon. Gentlemen opposite do not like being reminded of what they were saying a year ago, but they will be reminded of their election speeches at every opportunity open to us.
If the Minister takes pride in his achievements and is satisfied that the country is behind his present policies let us have the Macclesfield by-election. Why the delay? There are some good farmers in Macclesfield, a constituency close to mine. If he is confident that his policies are publicly acceptable, let him join with me in asking the Prime Minister to issue the writ for the Macclesfield by-election. In fact, of course, he has no confidence in the success of his policies and his speech was nothing if it was not apologetic.
I have previously said that I regard the E.E.C.'s common agricultural policy as an obscenity in a hungry world, for it combines food surpluses with high prices.


Normally when prices are high, food is in short supply, and when food is plentiful and in surplus, one expects prices to be low. The C.A.P. is indefensible in a world in which so many people live stunted and deprived lives. It is based on self-sufficiency and is unworthy to replace the provisions of the Tom Williams Act of 1947.
My right hon. Friend the Member for Workington referred to the important letter which was sent yesterday to the Chancellor of the Exchequer about V.A.T. and food. It was sent, on behalf of every member of the Co-operative Parliamentary Group, by my hon. Friend the Member for Bristol, Central (Mr. Palmer). The letter points out that the Conservative Party 1970 General Election manifesto envisaged a value-added tax to replace selective employment tax and purchase tax, and my hon. Friend reminds the Chancellor that a clear and unequivocal assurance was given that
it would not apply to food, except for those few items already subject to purchase tax.
My hon. Friend the Member for East Stirlingshire (Mr. Douglas) was told in a letter dated 14th May last by the Minister of State at the Treasury:
We have given an undertaking that food will get relief, but the precise form of the relief has yet to be decided. In fact Customs and Excise officials have been discussing the various forms of relief with representative trade associations who are in contact with them and whose views are being considered, but it is still too soon for decisions to be taken.
The whole of the Co-operative Movement, on whose behalf the Co-operative Parliamentary Group has been extremely active in this matter over recent weeks, is gravely concerned about this subtle change of emphasis. The matter is of the highest economic and political importance and I ask the Minister to clarify this issue beyond doubt when he replies to the debate and also to give a categorical assurance that food will not be subject to V.A.T. whether at the standard or a reduced rate. All I am asking is that the Minister should speak today in the accents of his election manifesto by making it absolutely clear that food will not be subject to this form of taxation.
I hope that there will be no attempt in the debate to transfer blame for rising prices to retailers. Those in the retail trade have been very hard-pressed in

recent months. They have been in the front line of the battle against unprecedented price increases. In November, 1970, the Observer printed a list of what it described as the food that an average housewife with a family of four to feed might buy on a typical weekly trip to the supermarket. This list was compiled for London shops. In June, 1970, it totalled £5·82½. It is now £6·70½—a rise of 15T per cent. The list also showed that there is a substantial saving if one shops at the Co-op. Indeed, the figures reflect very favourably on the co-operative shops included in the survey. Of course, the Co-operative Movement knows that its problems are shared by other retailers. Yet the Cooperative Movement is doing at least as well, not to say in many cases better, than other retailers of high standard.
There has been some reference in the debate to the decision to cancel the primary school and welfare milk schemes. Many of the right hon. Gentleman's hon. Friends know that I have been consistently concerned to oppose this decision. I was unable to support my Government in the previous Parliament when they decided to cancel the supply of free milk for secondary schoolchildren. The right hon. Gentleman will recall the stand I took on that occasion. It is important that he should now explain what representations he has made to the Treasury and to his right hon. Friend the Secretary of State for Education and Science about the very strong feelings in the farming industry about the ending of the primary school and welfare milk schemes.
In a recent statement the Milk Marketing Board said:
The Milk Marketing Board view with great concern the proposed changes in the school and welfare milk schemes. These must have a serious effect, both on the nutrition of the young and on farmers' incomes, which are already under extreme pressure from spiralling costs and wages. The Board hope they will be given the opportunity for further consideration and consultation on these fundamental changes.
There is no doubt that opposition to this policy, which many of us regard as deeply retrograde, is not confined only to the national leaders of the industry. On 16th June, the anniversary date of the Prime Minister's "at a stroke" speech, the Western Mail said:
The Carmarthenshire and Cardiganshire branches of the National Farmers' Union have


urged their county councils to defy the ban and provide money from the rates.
These are very important constituent organisations in the National Farmers' Union. We have reached the position where members of the N.F.U. are asking their elected county councillors to defy the Government by continuing to supply free school milk. There is much that could be said about the value of milk for children in their primary school years. I have explained elsewhere that the absence of an adequate intake of milk can mean that we shall have more cases of hypoplastic, that is, honeycombed, teeth. That is why I have described the Government's policy as a prescription for ugliness. In Manchester, according to a recent medical report, we have more and more cases of very young children who need false teeth. In my submission, it is preferable to spend money on providing milk for children than in supplying them with false teeth.
What is the net saving to public funds of cancelling the supply of free milk in primary schools? I hope that the hon. Gentleman will address himself to that question very seriously. The Secretary of State for Education and Science has said that the saving will be £9 million. The previous Government argued that the saving which would accrue from cancelling free milk in secondary schools would be £4·5 million. But I understand that the net saving was no more than £1·2 million. Too many hon. Members do not take into account the workings of the agricultural determinations. Far too many right hon. and hon. Gentlemen fail to appreciate the very large stake that the Ministry of Agriculture, Fisheries and Food has in this field. I hope that the hon. Gentleman will make it quite clear that the figure of £9 million is a grossly inflated one. Equally, I hope that he will say what he expects to be the net saving to public funds from this deeply unfortunate policy.
The right hon. Gentleman referred to his policy for the imposition of levies. Unfortunately, he did not refer to the attitude of the National Federation of Meat Traders' Associations. As he knows, the federation has bitterly attacked the very principle of levies on imported supplies. Mr. Tyler, the President of the National Federation, has accused the Ministry of

… attempting to hoodwink us by putting forward this scheme under a false promise. The Minister does not like us calling it a tax on meat, but that is precisely what it is. The intention is to raise money for the Treasury and to increase the price of food to the consumer. It will not help the farmer one jot".

Mr. Peter Mills: Absolute rubbish.

Mr. Morris: The hon. Gentleman, who occupies an important position in the Conservative Party's agricultural group, refers to what Mr. Tyler said as "absolute rubbish". The hon. Gentleman has issued certain invitations during the debate and I hope that he will now explain to Mr. Tyler and the National Federation why in his view that statement is neither more nor less than rubbish. For my part, I regard it as a very important statement about the feelings of the industry on this matter.
The debate began with an assessment of the value of the 1947 Act over the years. By common consent the right hon. Gentleman's policy is a major departure from the principles of that Act. Indeed, he made claim that his principal purpose—[Interruption.] If the hon. Member for Richmond, Yorks (Mr. Kitson), who now comes to these debates very infrequently, wishes to take part in the debate, perhaps he will catch the eye of Mr. Deputy Speaker.
The right hon. Gentleman may claim that this is his main purpose. But as a warning to him, I quote from "Britain and the Common Agricultural Policy", a critical commentary by the Trade Information Bureau:
Furthermore, tendencies towards autarchy in agriculture might well spread to other industries unless checked. Protectionist trends in North America and in Japan are likely to be further encouraged by such policies in Europe. The trend could lead to damaging trade warfare with serious social and political consequences around the world.
Friends of ours in Australasia and other parts of the Commonwealth are deeply concerned for their future. There are Australian farmers who produce cane sugar as efficiently and as cheaply as farmers anywhere in the world. They want to know why they had to plead, not to be represented at the recent Lancaster House conference, but merely to send an observer.
The Minister knows something about sugar. He will agree that if Australia is


excluded from the British market, it will have a very bad effect on the International Sugar Agreement. Many experts would argue that the I.S.A. would be destroyed if Australian sugar were to be excluded from our market. At present, Australia sends us more than 330,000 tons annually. If we destroy the International Sugar Agreement, by throwing Australian sugar on to the world market, we shall do harm to 40 developing countries. There will be that number of very poor countries which will suffer very serious hurt to their economies.
I want Australian food, New Zealand food, Canadian food, food from the West Indies and food from elsewhere in the Commonwealth, to have continued access to the British market. British housewives want to buy food from their traditional suppliers. They also want our agricultural industry to thrive. I yield to no one in my praise for the agricultural industry. I know that our industry has enormous achievements to its credit. I pay tribute also to farmers throughout the Commonwealth who traditionally have sent cheap food of a very high quality to Britain.
In the debates which are impending on British entry to the Common Market, the right hon. Gentleman will hear very much more on this important theme.

6.23 p.m.

Mr. Patrick Wolrige-Gordon: Even before the hon. Member for Manchester, Wythenshawe (Mr. Alfred Morris) spoke there had been two strongly anti-Common Market speeches from the Labour benches. The hon. Member for Wythenshawe did not disappoint me either in dealing with the subject. Much of his speech was simply an anti-Tory speech which did not interest me so much, but I was greatly interested in what he said about the Common Market and the position of different peoples in different parts of the world who will be affected by Britain's entry or non-entry.
What I believe, to quote his own word, is "obscene" in a hungry world is not so much the creation of food surpluses as the apparent inability to transport these surpluses to the hungry people who need them. This is a problem that Britain has not necessarily been any more successful in solving than our European

friends. I hope that the Government will be making every effort in this direction if we are to join the Common Market.

Mr. Alfred Morris: New Zealand made its food surplus available to hungry people at the time of the Behar disaster. The buttermilk biscuit went in very large quantities from New Zealand to help the hungry people of India. Commonwealth countries have a great deal of which they can be proud in this respect.

Mr. Wolrige-Gordon: I agree with the hon. Gentleman. I do not think that anyone questions the determination of this Government to look after the New Zealand position and that of our friends.
Yesterday my hon. Friend the Under-Secretary of State for Foreign and Commonwealth Affairs said this in answer to my hon. Friend the Member for Yarmouth (Mr. Fell):
What we have asked for is a categoric statement that the present common fisheries policies would be modified after enlargement to meet the circumstances and the needs of a Community of ten."—[OFFICIAL REPORT, 21st June, 1971; Vol. 819, c. 968.]
Will my hon. Friend the Under-Secretary of State for Home Affairs and Agriculture, Scottish Office, make it clear when he winds up the debate that that was not wholly accurate? The position as I and as most other people have understood it is that the Government will definitely have this matter clear and established before entry into the Common Market so that those of us who represent fishing interests and fishing constituencies can make up our minds on what the facts are before we join.

Mr. Prior: The position is exactly as my hon. Friend has stated it. There are the two points. First, what is suitable for a Community of six is not necessarily suitable for a Community of ten. Therefore, there should be the changes that that requires. Second, there was a very firm commitment on limits for the inshore fishing industry. That is the second part of what we have always said.

Mr. Wolrige-Gordon: I am grateful to my right hon. Friend. I shall be satisfied so long as the final outcome of the negotiations is absolutely clear before any decision as to entry is taken. However, I am not at all happy about the


position that the Government took up on the six-mile limit.
I thought that they jumped off their reservation far too quickly without even giving Custer the chance to make his last stand. I hope that we shall have the chance to rectify that.
As a Scotsman I intervene with some trepidation in what is largely an English agricultural debate. I want to deal with a specific point. In these debates it is usual for those on the Front Benches to embark on a tour d'horizon. My right hon. Friend's speech was also a tour de force. The debate gives some of us the chance to represent more detailed issues which concern all of us. I wish to do so from the Scottish point of view, because there are present developments in English agriculture which are liable to have an undue influence on the development of Scottish agriculture.
I refer particularly to the decision to abolish boar licensing and to postpone any decision on bull licensing. I declare a very small personal interest in that I own a very small farm.
This decision will be of great effect in Scotland. We understand perfectly well all the arguments in favour of abolishing licensing. Many of the arguments are soundly based on the issues of the increasing hybridisation of livestock production and the need therefore for greater flexibility in licensing sire stock.
But that is as far as it goes. Greater flexibility in administration is possible. There are even many ways of abolishing the bureaucracy in sire licensing, short of abolishing licensing itself. But no amount of greater flexibility can justify, particularly for Scotland, the risks of ruining the major part of livestock production by throwing open the existing barricades to scrub boars and possibly—this is our fear as well—to scrub bulls in the future.
I say "particularly for Scotland" because livestock production is such a major part of the agricultural industry of Scotland. It is pertinent to remember, particularly at this stage, that one of the main arguments in Scotland for the Act of Union was to secure an uninterrupted prosecution of the cattle trade. The cattle trade was one of the basic staples of

Scottish economics then; it is one of the staples of Scottish economics now—not only the cattle trade but the whole range of livestock production. Generations of skill, training and experience have contributed to making that production in Scotland central to the world's meat industry.
It is no surprise to us that, though comparatively not such an important proportion of English agriculture, envious eyes are often cast from south of the Border at the position in Scotland. While the administration of Scottish agriculture and in particular sire licensing remains in the largely autonomous hands of the Scottish Department, this kind of envy did not cause us any alarm, but the position has been complicated for us in Scotland by the advent of the Meat and Livestock Commission, with what at first seemed uncritical total adherence to the gospel according to genetic science.
There are two dangers for Scotland in that situation. The first is that the Meat and Livestock Commission is a national body with a writ in Scotland. Secondly, that gospel of genetic science is not foolproof. I have met a genetically-produced boar, for example, which was splendid in every genetic particular—until it was discovered after six months work that he was infertile.
I hope that hon. Members and my hon. Friends will understand that my concern here is for an industry essential to Scotland's future, a future which is under threat from two factors. First, the drive to abolish sire licensing will directly affect the quality of livestock production in Scotland. Anyone who thinks that it will not has no idea of the financial pressures facing producers, particularly in the hills and uplands.
After its abolition, pressure will immediately begin for some kind of licensing authority. There is no question that this means that the return of some sort of licensing authority will be sought. The reasons will be obvious. The fear is that this function will revert, not to the Ministries, as now, but to the Meat and Livestock Commission, which is run from Bletchley. It is English-orientated. It has distinguished Scottish members who have to travel long distances, but power is weighted against them; the balances are tilted in favour of English science,


English location, English herds and English personnel.
I ask my right hon. Friend to consider giving us a Scottish Meat and Livestock Commission. It is standard practice for boards of this kind. I remember the speech which he made in an earlier incarnation from the other side of the House, and the endearing language he used about the White Fish Authority, a similar body established to help the fishing industry. That Authority has a Scottish Committee. The Herring Industry Board is a Scottish body as well. There is nothing revolutionary or extreme in what I have asked for—simply that there should be a Scottish Committee of the Meat and Livestock Commission. At this stage there is a fear in Scotland that the politics and possible control of the industry is weighted unfairly against her, and that a division of this kind would help to enhance particularly Scottish objectives and interests in the industry, which is of such very great importance to agriculture in Scotland.
Finally, could the Government make plain its policy and intentions in regard to livestock production? Is cattle breeding to continue as a private enterprise industry or shall we accept the blandishments of centralised control and a national herd? I cannot believe that my lion. Friend accepts the latter policy. If he accepts the former, will he make it plain that such public bodies as be involved, like Ministries or the Commission, exist as partners and collaborators with the industry rather than as its masters?

6.35 p.m.

Mr. John Mackie: I congratulate my hon. Friend the Member for Bromsgrove (Mr. Terry Davies) on. a very concise and to-the-point maiden speech. Its conclusion was one of the nicest points made in the House this afternoon.
Like my right hon. Friend the Member for Workington (Mr. Peart) and the hon. Member for Aberdeenshire, East (Mr. Wolrige-Gordon), I must declare an interest. Unlike the hon. Gentleman's, it is not a little interest; it is an interest that helps to augment the pittance we are paid here.
I do not think that there is any need for the hon. Gentleman to apologise for

entering the debate with a Scottish matter. This is a United Kingdom debate, and a Scottish Minister is to speak. I cast no reflection on that Minister when I say that I am very sorry that the Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food is not here. I hope that he will return to good health in due course. He and I entered the House together and have the same interest.
I entirely disagree with the hon. Member for Aberdeenshire, East about sire licensing. My only disappointment is that I did not have enough influence when I was at the Ministry of Agriculture to see that it was done away with.
I know that the political point is made from this side of the House that many Conservative hon. Members do not know about mining and engineering, but the Minister should not suggest that there are not hon. Members on this side who know a little about agriculture. The right hon. Gentleman was very arrogant when he suggested that the farmers from 1966–67 onwards were in a great state of despair and so on. That was a gross exaggeration. I think that he himself has admitted that many factors during those years did not help farming. We had two of the worst springs and one of the worst harvests in that period. Conservative hon. Members—and here I look at the hon. Members for Torrington (Mr. Peter Mills) and Westmorland (Mr. Jopling)—did not help the situation by blaming us for things that the weather did. They sat at the back of the Chamber—we called them the noisy twins—and kept on at that point. It did not help the situation, because what they said was the sort of thing that gets reported.
I say without any apology that much of the unrest was politically-motivated. No one can say that I do not know my fellow farmers. The farming community is conservative to a degree. I do not blame it. I live in a farming community and know farmers pretty well. I am not necessarily blaming the hon. Gentlemen. If one is a Tory one uses all the methods, and Tories use methods that we certainly would not use.
The right hon. Gentleman said that he had a barometer—the farm improvements scheme. I did not, however, quite get his words. I would like the Under-Secretary of State therefore to make clear


the time factor of the scheme. There is a 40 per cent. grant for a short time, the scheme will bring people in quickly, and indeed it covers drainage and a lot of other things which the old scheme did not. I want to make sure that this new barometer of investment is as accurate as it should be if the right hon. Gentleman is to use it.
The hon. Member for Torrington said that the Labour Government had a restrictionist policy. Yet he knows that we were the only Government who did away with more standard quantities—indeed, nearly all of them. He also knows that we increased the middle band for pigs more than any other Government. To say that we were restrictive is a perversion of the facts.

Mr. Peter Mills: rose—

Mr. Mackie: The hon. Gentleman should take it. I did not interrupt him when he made this accusation.
The right hon. Gentleman blamed a lot of the food price rises on world prices. Yet in our term of office, when world prices also had their effect, he and his hon. Friends blamed us all the time. Now, with far greater rises in food prices in their eleven months of office, they are blaming it all on things outside their control.
It is difficult to attack the agricultural policy of a Government who have only been in office for a year because a policy takes a long time to take effect in agriculture. The Government can do many things which take effect quickly in many sectors of the economy, but any agricultural policy must overlap the policy of the previous Government. I will not give credit to this Government for their agricultural policy until about 1972, which is only fair.
The hon. Member for Torrington produced some figures about beef. If ever there was a dishonest set of figures, that was it. I have the correct figures here. He took the one year 1964. That was a year when beef production was 903,000 tons and when beef prices went to an all-time high for that period, just at Whitsun—a situation which drags out fat cows, indeed, anything that will walk on four feet, to the slaughter house. That figure was reduced by action on which

the Labour Government could have no effect, so that in 1965–66 it was 703,000 tons. The average which every decent person would have used instead of the period which the hon. Gentleman mentioned, which is a four-years' average. The figure for that period, therefore, is 804·5 thousand tons, whereas for the period 1967 to 1970, which was the first period our policy could effect, it was 913,000 tons, a difference of nearly 110,000 tons. Those are the accurate figures. Taking a one-year figure, as the hon. Gentleman did, makes a mockery of argument. That is why we should not bother to listen to the hon. Gentleman.
I am here to defend what we did when we were in Government. The Minister gave us little credit for what was done in getting the emphasis back on to stock that had been lost. He went back to 1964 in speaking of increased production. But that increase in grain production was unaccompanied by any increase in other products, which gave us an imbalance in farm production which we spent five years trying to put right. If any Government should be indicted for creating a bad farming situation, it is the Tory Government previous to 1964. There is no doubt of that. When we left office there was far more milk production and far more beef cattle, especially in Scotland—whether this was due to sire licensing or not, I do not know. There were more pigs. We were down on sheep production on low ground, but we nearly held the numbers on the hills. If it had not been for the disastrous harvest of 1968 and the terrible springs of 1969 and 1970 in some areas, our crop record would have stood up as well.
I have recently been all the way from the North of Scotland to the South of England and the crops are looking well. No doubt, the Government will take credit for that as well. We have had a beautiful spring and, so far, a good summer. But the right hon. Gentleman will remember how well things were in June, 1968. and what a disaster we had later. He should not count his chickens yet.
As I have said, we cannot judge the Government's agricultural policy until well into 1972, but what we can examine is their reasons for it. It is not an agricultural policy at all, but a financial policy. I remember that when he was in Opposition some of my hon. Friends were twitting the present Prime Minister about


what he would do to reduce taxation. He leaped to his feet and as quick as lightning, said, "Take agriculture and food". He got no further because he was howled down. That was long before the right hon. Member for Grantham (Mr. Godber) made any announcement of future Tory policy on agriculture. The words of the present Prime Minister show that what the then Opposition were looking for was to save money and taxation. [HON. MEMBERS: "Nonsense."] I am only going by the Prime Minister's attitude on that occasion and on what we now see happening.
We produce half our food and buy the other half. The half we buy is cheaper to the tune of about £350 million than home-produced food. That £350 million is not put on to the price of food but is paid direct to the farmers and comes from the taxpayers. The right hon. Gentleman has tried to claim that the levies we agreed on and his levies are exactly the same. That is nonsense. The Government's policy is to make the consumer pay most of that £350 million by increasing the price of home-produced food to the farmers. The right hon. Gentleman has been egged on by his hon. Friends to do it. If he does do it, he will increase input into the farmers and it will be more than £350 million if he is to raise prices as high as he has indicated. To do this, he must raise the prices of imported food as well.
What will be the effect of this policy? Let us take the case of the Government first. The right hon. Gentleman intends to leave some of the grants, but the Government are going to save some £250 million in deficiency payments in a year, and they will raise the price of imported food by levy by about the same amount. The respective figures given in Opposition by the right hon. Member for Grantham were £200 million and £400 million, but by present-day levels it means that the total will not be £400 million but more than £500 million.
It is anyone's guess what the Government will do with this money. What does the farmer get out of it? He gets roughly the same price. It has been said that there will be no fluctuations with the levy system. Look at what happened to barley this year. Compare the price of barley in March with its

price today and it will be seen that there was a difference of £6.50 a ton. Is it suggested that that could be controlled through the levy system? Could levies be moved quickly to deal with a difference of that sort? Food prices are the most volatile of all prices. The farmer will lose what has been the mainstay of agriculture over the last 20 years, the guarantee. Farming is a long-term business and that guarantee is invaluable. The Government say that they have a fall-back price, but they are very cagey about telling us what it is to be.

Mr. Prior: The hon. Gentleman says that we are cagey about the fall-back guarantee. May I make it clear that until such time as a fall-back guarantee is introduced the present guarantee system remains. I am as keen as the hon. Gentleman to retain confidence in the industry.

Mr. Mackie: That may be; I am merely dealing with the Government's policy. There is this argument about how much farmers will get with this plan. The right hon. Gentleman the Prime Minister said that farmers would be able to go ahead without having to look over their shoulders at the Treasury. If the right hon. Gentleman thinks that the Treasury will have no interest in his policy in future, then he has another think coming. Right hon. Gentlemen will have to look over their shoulders at the Board of Trade and at the customer. There are a lot of them, 57 million, and it is they who will get the thick end of the stick.
Just what will the consumer get out of this? I estimate that there will be a 12½ per cent. rise in prices as a result of this system and, by the time the wholesalers and retailers get their cuts it will be something like 15 per cent. or more. The point is often made that not all imported food will bear the levy. The right lion. Gentleman knows that if he seeks to support the milk price by a levy on butter and that puts up the price of butter then people will turn to margarine. This is happening now. My daughter tells me that she is buying margarine because of the price of butter. The next thing that will happen is that the Minister will have to put a levy on edible oils to increase the price of margarine so that people will start eating butter again.
The same thing will happen with apples and pears—and we all remember his famous reference to peaches. If apples and pears become too expensive and people start eating peaches and melons then he will have to put a levy on them to bring people back to the apples and pears. It is the consumers who will suffer.
It has been suggested that it is time that we stop pursuing a cheap food policy. There is nothing immoral about such a cheap food policy nowadays. I admit that it was immoral when we were buying our cheap food from the underdeveloped countries about 50 years ago. Today we are buying it from the wealthy countries such as America, South America, New Zealand, Canada, Australia. Surely our people have the right to expect to buy food as cheaply as possible. It would be immoral if the farmworker and farmers in this country suffered as a result, but provided we support them there is nothing immoral about cheap food. It is of tremendous benefit to an industrial country.
The right hon. Gentleman must bear in mind, when he talks about his new system, that the Treasury will be watching very closely; that it will be of doubtful benefit to the farmer and that it will impose burdens on the consumer. It has been made plain that this is a deliberate part of Government policy and yet hon. Members opposite said that they would contain food prices. They had no business to suggest that they would contain prices let alone reduce them while pursuing this policy.
I want to deal with two mean and niggling little things which this Government have done within agriculture. There are many such niggling things outside of agriculture, such as the abolition of the Consumer Council and the imposition of museum charges, but I would be out of order in referring to them. Within agriculture I am thinking specifically about the removal of the grant to rabbit clearance societies and the winding-up of the North Pennine Rural Development Board.
Agriculture will rue the day that this grant was removed, because the rabbit population will become a menace. I bet that the hon. Member for Ross and

Cromarty (Mr. Gray) does not agree with his party on this. This was a small grant which did a tremendous amount of good. It cost £2 million or perhaps less, but it provided just that little bit of encouragement to rabbit clearance societies. This business of standing on our own feet is all very well, but it does not always work. Right from the very beginning when Government began taking an interest in farming there has been this little encouragement in different ways. First was the lime subsidy in 1932 or 1933, followed by the ploughing grant and so on. The Minister will find that the removal of these encouragements will do more harm than the resultant savings will do good.
As for the rural development board, my right hon. Friends and I thought that we were introducing a new concept into an area where it is almost impossible to make farming viable on its own. We combined tourism and forestry with farming. The Minister has made excuses for scrapping the board, and I doubt whether I have ever heard more feeble excuses than those he has given. I will not repeat them, they are on the record and they do not read any better than they sounded. If anything was in pursuit of political dogma, it was the abolition of this board after it had been in operation for less than two years.
There is also our policy towards the E.E.C. I have not treated this debate as having anything to do with Britain entering the Community. We know that there will be alterations in the common agricultural policy, and, by going over to levies before entering the Common Market, we have thrown away an arguing point for a system of levies to put a floor on the market and to provide deficiency payments within the Ten.
It is difficult to judge policies the effect of which will not be seen until 1972. The Minister has been cagey about expansion; he has not said where or how much. That is a good political attitude to adopt if one is not very courageous and not sure whether expansion will be achieved. There is room for expansion in agriculture, but I ask the Minister to be chary of using the over-optimistic figures in the "Little Neddy" Report and the Select Committee on Agriculture. The main argument is based on an increase in arable


acreage of about 1⅓ million acres to grow feed grains. We know that in theory these acres are available, but when driving round the country one sees tens of thousands of acres which will never be ploughed, acres which need to be drained and acres where there is not full utilisation of grassland. I warn the Minister that it will not be easy. It is easy to get an increase in gross production by buying abroad, but that does not help the country, which needs an increase in net production. I know the Minister is interested in achieving increased production, although I disagree with his policy. I hope that by 1972 we shall be able to judge whether the policies are right, but meantime I "hae my douts".

7.3 p.m.

Mr. Ralph Howell: I would like to add my congratulations to my right hon. Friend the Minister of Agriculture for the excellent work he has done during the past year. He has had possibly the most difficult task of any Minister in the Government, and he has rescued the agricultural industry from a dangerous position. By pursuing our policy of increased production and getting the most we can out of the land we are on absolutely the right course, and I trust we shall continue to pursue this course through thick and thin, whatever criticism is thrown at us. But I warn the Minister that all is not well in agriculture. Confidence has been restored by the interim price review and by the good price review in the spring but, nevertheless, the industry is desperately short of capital, and will continue to be short for some time, even though we may have several good price reviews and the good weather which we so desperately need.
My right hon. Friend spoke of better marketing. I have been farming for 22 years and during all this time Ministers have talked about better marketing. It is about time we had it. A few weeks ago I tabled a Question asking if the time was now ripe for meat and cereal marketing boards to be introduced, to which I received the rather silly answer that it was up to the producers to produce a marketing board. They have not done so in all these years, and they never will. The N.F.U. will never take the lead in this matter. If the Government think it is desirable, as I do, it is up to them to create more orderly marketing in these

commodities particularly in the transitional period between now and our possible entry into the Common Market.
At present there is no marketing organisation, with the result that most of the cereals are thrown on the market as soon as the combines start to roll and, with the farmers being so short of money, there is an even greater compounding of grain which is thrown on to the market in August and September. I urge the Minister seriously to think about setting up statutory marketing boards.
The Opposition are sitting on those benches opposite because they failed agriculture and, more generally, failed the poorer sections of the community. While the Labour Government were in power, the poor became poorer, particularly the agricultural workers. The agricultural workers received little benefit from the people who claimed to be looking after the weaker sections of the community and the poorer people. When the Conservative Government went out of office, the agricultural worker was lagging £5 behind the average wage. When the Labour Government went out of office, he was lagging £8 behind. This is what the cheap food policy means. So long as we pursue cheap food we shall be paying poor wages to our agricultural workers who have served this country faithfully and conscientiously and without striking, although they have been consistently underpaid.
We must think too about our competitors—Germany, France and Japan. Why do they not buy the cheapest food they can get? Why do they see the sense of using their agricultural assets as fully as they can and not sucking in cheap food from New Zealand and other countries? While they pay much higher agricultural prices to their farmers, their industries still turn out goods more cheaply than we do. It is the feather-bedding of industry through the cheap food policy of the last hundred years which has allowed our industries to get into such a rut.
I hope that it is not too late to make a point about the fishing limits. I understand that the terms are on the point of being agreed, but I hope it is still not too late to think again about this. We have made a mistake in moving our ground on the question of the six or 12-mile fishing limit, and have left it to the Norwegians to state what the position should be. I


hope that we shall be able to get back from talking about a six-mile limit to where we were originally.
The 12-mile limit was agreed internationally only seven years ago by many of the countries who hope to benefit by a revision of the fishing agreement. I cannot understand why we should be giving anything away. This affects my constituency very considerably. Between Cromer and Flamborough Head I understand that no foreign fishermen are allowed to fish. We are now talking of 10 countries being allowed to come and fish as they wish.
This is a most important conservation area and we should insist that the arrangements agreed in 1964 by the then Conservative Government should remain. I believe that only six vessels police over 2,000 miles of coastal waters, an utterly impossible job to do. I believe that there is considerable poaching within this 12-mile limit and ships come in as close as seven or eight miles from the coastline. Naturally if the limit is shifted from 12 to six miles this poaching will still occur and all the conservation which has been aided by our fishermen and all the care that has been taken will have been wasted. Foreign fishermen will come in and will have much less regard for conservation matters.
I have always been a very keen Common Marketeer. In fact, I was in favour of the idea of a united Europe before the Common Market was thought of. But I have never been and never intend to be a supporter of common harvesting. I do not see why a Frenchman should come and harvest my barley or that anybody else should come and fish in our waters. It seems utterly wrong that we should be giving way on this matter. I hope the Government will think again and will adopt the attitude which has been taken up by Norway.

7.12 p.m.

Mr. Eric Deakins: As hon. Members will know, I have an agricultural interest to declare since I am a consultant to a firm in which I was employed for over 15 years before coming to the House of Commons. I hope that my interest will serve not to cloud my judgment, but will enhance the

value of contributions I hope to make on agricultural subjects in this House.
I was struck by the rugged individuality of the speech of the hon. Member for Norfolk, North (Mr. Ralph Howell); and, although I did not agree with everything he said, I admired the way he said it. There are many hon. Members on this side of the House, whatever their views about the Common Market, who would support the stand which he asks the Government to take on fishing matters. I share a number of his views on agricultural marketing, and I shall allude to them a little later in my fairly brief remarks.
I begin by reminding the House that this is the first full-scale debate we have had on agriculture in this Parliament. It is a somewhat sad occasion since this is the first debate in this House since the 1947 Act which, in effect, marks the end of the post-war bipartisan policy on agriculture. Whatever the faults of the 1947 and 1957 Acts, the system which has existed in the post-war period has meant that farming has prospered in a way that had never happened in the previous 100 years. This was in complete contrast to the dreadful farming conditions in the 1920s and 1930s when, of course, the farming community was without the support of such legislation.
The policy which is being substituted, a levy policy, contains a number of serious faults and these faults are not wholly appreciated by the farming members on the Government benches.
The bipartisan policy stems partly though not entirely, from the Government's desire to save money. In seeking to implement their new levy policy they have to a certain extent been aided and abetted by the National Farmers' Union. I feel that the farming community, which tends to support a Conservative Government rather than a Labour Government, has given a welcome to agricultural policy initiatives which is unjustified from their own point of view. If their performance at the time of this year's Price Review is anything to go by, it looks as though the farmers have come down off the fence on which they have been sitting in the post-war period and, unfortunately, they have come down on the wrong side. I believe they should not have come down off the fence at all.
At this year's Price Review they were a party—I use the term advisedly—to a change in the pattern of estimating cost increases from one year to another under the 1957 Agriculture Act, which was a gross deceit on the House and on the country as a whole. A "fiddle" was perpetrated—again I use the word advisedly—whereby cost increases in milk and eggs outside the standard quantities were, for the first time since the 1957 Act, not taken into account in the Price Review.
The Minister has given some evasive answers on this matter, there has been correspondence between my right hon. Friend the Member for Anglesey (Mr. Cledwyn Hughes) and the Minister and Questions have been put down by hon. Members such as myself. The whole affair has ended unsatisfactorily. I do not wish to allude to this matter at length, except to say that I hope that it is being pursued elsewhere in the House. A great principle is at stake, which is whether the Government are right in their interpretation of a major Act of Parliament involving the expenditure of taxpayers' money.
The Government have sought to introduce levies not only for monetary but for ideological reasons. I do not regard it as a fault for a Government to do things for ideological reasons. Indeed, I feel that some of my right hon. and hon. Friends could learn from the Government's example. The next time we have a Labour Government, it may be one with a different complexion of policies from either post-war Labour Governments. It may well follow the example of the present and be much more ideological than we have seen on the Left in this country since the war.
In ending their bipartisan policy, the Government are aware that this breaks our trading links with overseas territories. If levies are to be put on cheaper food imports from Commonwealth countries and the Argentine to help our own farmers, which is a worthy aim, this will disrupt trading links with these countries. The initial levies introduced so far are not high and are unlikely to present any major disruption to trade in the Commonwealth. It is true that our trading partners overseas have reserved their position on whether they will retaliate against the imposition of levies on their

agricultural exports to this country by taking counter-measures which will harm our own exports. Let us hope that this will not happen.
I fully support the views of my hon. Friend the Member for Enfield, East (Mr. Mackie), who said that there is all the difference in the world between the levy system contemplated by the Labour Government and that which is to be introduced by this Government.
The Minister said that levies exist mainly to put a bottom in the market. That was the purpose of the Labour Government's levy schemes. However the Conservative levy scheme ultimately is designed to replace the system of guaranteed prices. Therefore, the levies will have to ensure that market prices, which will be all that the farmer will get, will be at least as high as present guaranteed prices, and those prices will have to be even higher than the present guaranteed price levels if farmers are to have the resources that they need for expansion and to stave off the effects of cost inflation.
That brings me to my first point, which is that the ultimate disappearance of guaranteed prices will not necessarily be an unmitigated blessing for our farmers. There are a lot of producers who are concerned about stability in their returns and, although we have not had for some years a system of individual guaranteed prices, the collective guarantee operating under the 1957 Act has meant that, over the year as a whole, the farmer who marketed his produce regularly could have a reasonable assurance for at least a year ahead of a fairly satisfactory and stable price.
We are told that there will be fallback guarantees to offset the effect of the loss of guaranteed prices. But we do not know where these fall-back guarantees will be fixed in relation to market prices or the levies themselves. Until the farming community knows more about what the fall-back guarantees are to be, whether they are to be like the intervention price in the Common Market, or whether the Government are to countenance support buying, farmers should be wary about giving an open welcome to the ending of the guarantee system and the beginning of the levy system.
I am not sure that all farmers are aware of the second criticism of the levy system. It is that, under it, once the 1947 and 1957 Acts have been swept away for this purpose, there will be no automatic recoupment of cost increases from one year to another. This is also a criticism of the common agricultural policy. At the moment, farmers know that because cost increases are taken into account at the annual Price Review, although they may not always get full recoupment of them, they have an opportunity as a statutory right to discuss their cost increases with the Government. There is always agreement on the level of increase from one year to another—that is, until the fiddle perpetrated this year—and there is a statutory duty on the Government to take these cost increases into account in fixing the price review determinations. That can no longer apply under a levy system since, once the levies are fixed, anything can happen to market prices, and the fact that farmers' costs go up will not necessarily make any difference to the level of levies, unless it be averred that levies will automatically be increased consequent upon an annual assessment of price increases on items like transport, fuel oil, and so on. These are matters which have been worrying farmers not only under the Labour Government but ever since the 1947 and 1957 Acts. They have to bear price increases, unless the next review does something about them.
My third criticism of the levy system is that no account appears to have been taken of the effect of higher retail food prices on patterns of domestic consumption. It would be all very well if wages went up as well and people could spend as much on food as before, in which case farmers would be better off under a levy system. But is it true that wages will go up to compensate for the effect of price increases? Is it true that sufficient social benefits will be given to the low-paid, those with large families and those living on fixed incomes, to ensure that the pattern of their food expenditure does not change? Shall we see a switch from butter to margarine or from beef to poultry and pork? These are the problems which will worry farmers, since vast changes in the pattern of retail food consumption must affect the demand and their prices for farm products. If

farmers are to depend entirely on market prices, they will be much more dependent than before on the pattern of domestic food consumption. I am sure that the Government are aware of some of these difficulties, and I suspect that that is why so far they have not revealed very much of the full details of the final levy system in three or four years' time. They are hoping that events will be overtaken by the adoption of the common agricultural policy, which is basically a levy policy similar to the one that the Government are introducing.
I question whether the common agricultural policy, or levy system, will make our farming more efficient. If it does not, will it benefit British agriculture? I am thinking of both farmers and farm workers.
We know that under the common agricultural policy there are much higher prices for many commodities and that there are also higher costs. In the case of some commodities, mainly livestock and cereal products, farmers will be better off since the extra prices that they get will be more than the extra costs that they have to bear. That may not be so true of pig and poultry farmers, but it is broadly true of beef and cereal producers. Farmers should be worried about the adoption of this policy because, with the exception of sugar beet, there are no production controls in the Common Market, and, despite what my hon. Friend the Member for Enfield, East said about getting rid of production controls, we still have some. We still have the ultimate production control in the Preamble to the 1947 Act, which says that farmers will be expected to produce the amount of food which it is considered to be in the national interest to produce. There has always been a weapon available to the Government if the production of any commodity exceeded the levels of self-sufficiency in the United Kingdom. In the case of pigs, we have the flexible guarantee arrangement in the middle band. That has worked well, but it will have to be abandoned under the common agricultural policy since it will go against the grain of the architects of that policy to have to adopt a policy which they rejected when they were framing their own policy.
My second criticism of the common agricultural policy is that restructing is


considered the major problem of agriculture in the Community. Although we have a problem in the shape of small and certain hill farms, I think that most people agree that restructuring as such is not a major answer to British agricultural problems since the size of farms in themselves is not a major difficulty. It is a difficulty, but it is not the major one that it is in Europe, since our average farm is more than twice the size of that in the Common Market. We shall be joining in a policy whose major aim would be irrelevant to the future of our farmers and farm workers. It is to benefit the nations whose agricultural populations are seven or eight times that of our own when expressed as percentages of the working populations.
My third criticism of the common agricultural policy is that this country will be asked to contribute resources across the exchanges to benefit the agriculture of the Common Market. I suppose that I am partisan in this connection and therefore my word does not necessarily carry very much weight. But, with permission, I shall quote from the Report of the Commission on the revised membership applications in October, 1969, which talked about the necessity for a
… drive to improve the structure of production in agriculture and of the relevant marketing system ",
and said that this
… will help the agricultural sector "—
in the Common Market—
to close the gap between the situation in the community and the highly efficient agriculture of certain candidate countries.
It is marvellous news for those who have always believed that British farming was, if not the most efficient, certainly among the most efficient in the world. At the same time, it is bad news in the long term because we shall be contributing national resources to improve the efficiency of our competitors at our expense. I think that this is a most disgraceful example of international folly. Only a Government absolutely hell bent on the Common Market at all costs would have accepted such a policy.
I turn now to the opportunities for expansion which would exist both under a levy system and in the Common Market. Under a levy system alone

there would be great opportunities for expansion, but at the same time farmers must be aware that there are limits. There are not only limits of climate and soil and the number of steers which can be raised per acre, and so on, but limits to the extent of the amount by which we can put up our levies to avoid interfering with agricultural trade between ourselves and other countries.
There is no doubt that when we get into the Common Market, if we do, the opportunities for expansion will also be considerable for farmers in this country, but the circumstances will be rather different because the opportunities for expansion will exist also for Community farmers. Some Community farmers, particularly those in Denmark and Holland and, to a lesser extent, in Southern Ireland, are as efficient in some respects as many of our own farmers. Therefore, if we see a gap between production and consumption of any particular commodity in this country, there is no point in throwing our caps in the air and saying, "Good, our farmers can fill this gap", because, in trying to fill that gap, they will be competing with several million producers scattered throughout Western Europe. Therefore, although our farmers are, on the whole, more efficient, they will not necessarily be able to fill the whole of that gap between production and consumption.
Farmers generally appear to have welcomed the idea of a levy system replacing the system of guaranteed prices. I and many of my hon. Friends believe that farmers are wrong. However, they are businessmen and must be presumed to know their own business. I hope that in a year or two it will not be necessary for hon. Members on this side of the House to remind farmers of the joy with which they greeted the advent of the Conservative Government and the ending of the bipartisan post-war agricultural policy. Perhaps we ought to be telling them now, in the words of an 18th century statesman at the beginning of the war of Jenkins' Ear—I think it was in 1759—"Now they are ringing their bells. Soon they will be wringing their hands."

7.33 p.m.

Mr. Marcus Kimball: The hon. Member for Walthamstow, West (Mr. Deakins) brings a welcome inside


knowledge of certain sections of the agricultural industry to these debates. He is a valuable addition to the other side of the House on such matters. I am sorry that he thinks that the bipartisan policy of agriculture has ended. I never thought that it existed.
This is not the first agricultural debate which will end in a major division. During the past 15 years I have found myself fundamentally opposed to hon. Gentlemen opposite on most countryside issues. The hon. Member for Walthamstow, West is not as white as he makes out on levies. I thought that the Labour Party had been moderately firm about minimum import prices while in Government. Minimum import prices are not far removed from a system of levies.
We all welcomed the hon. Gentleman's remarks about the room for expansion of British farmers within the E.E.C. He has gone a little way to putting right the most irresponsible and damaging remarks made by his hon. Friend the Member for Cardigan (Mr. Elystan Morgan). I am a hill farmer, though not in my constituency, and I can find nothing in the E.E.C. regulations which prohibits the present system of hill-farming grants. Those of us who take an interest in hill-farming may believe that the time has come for a restructuring of these grants. The study being carried out by Edinburgh University may show that instead of the capitation payments which are made particularly for sheep, it would be to the advantage of the hill farmers if a higher acreage payment were made on improved in by land to encourage better lambing percentages and a better return to them. There is some doubt about capitation payments. We might do better to put more on wool, because at least we get the wool clips.
Farmers are asking how they will fare if we enter the E.E.C. However, I find there are other more pressing problems with which I should like to deal. Most farmers are sensible. They are prepared to wait and see what the final terms are and what the White Paper says when we get it. The most important thing for the farming industry is that, during the transitional period and any time which we have in hand before we have to face the competition to which the hon. Member for Walthamstow, West referred, particularly from Southern Ireland and from

efficient farmers in certain parts of France, we should continue to put our own house in order.
It was most encouraging when the Minister, at the beginning of the debate, said that people are again making their farms efficient and that demands for capital grants have gone up. This is the important indicator which we have had today. Those of us who have been about in the countryside during the last few months will have noticed how the polish is coming back to farming. Many more ditches are being dug out and farm improvements are going ahead. There is a feeling of confidence.
The hon. Member for Enfield, East (Mr. Mackie) said that he had recently travelled from the North of Scotland to the South of England. I should have thought that on that drive the only thing he could see wrong in the countryside was a lot of grass going to waste. We are short of livestock. I hope that the change of emphasis in the policy will put this right.
The first big benefit which will accrue to farmers will come on 5th July when we get the substantial cut in S.E.T. Over the last two years the one item to which auditors have consistently drawn attention on any farm balance sheet is the excessive increase in farm machinery repairs. This is where S.E.T. had its worst impact on the farming community. It was unpopular as a forced loan, and we are now nearing the point when this pernicious tax is coming to an end.
Here it is right that I should pay tribute to the divisional offices of the Ministry which have dealt with refunds of S.E.T. They have come through promptly if farmers filled in the forms quickly and sent them off. The forms for repayment were simpler to fill in than many of the forms which have to be sent to Cumbernauld. The Ministry has handled that work in an efficient manner while the beastly tax has been in force.
My constituents have always been penalised and worried by capital taxation. The big farming families of Lincolnshire have survived by passing their farms on to their children. How welcome it was to see in the Budget the lessening of the impact of capital gains tax and death duties on the farming community. Hon. Members on both sides have said that


farming is short of capital and that capital taxation on farming is a wicked thing.
Apart from doubts about the E.E.C. and interest in it, one problem, particularly in East Anglia at the moment, is the serious spread of fowl pest. What is worrying people throughout the countryside as a whole is the impact which this disease is having on wild birds. In some parishes in my constituency all the wild birds are now dying from fowl pest. It is described as a form of "Avian mumps" from which the birds are suffering. I believe that this has happened because we have allowed the use of live vaccine, to meet pressure from the poultry industry. The live vaccine is cheap to administer. It can be put in the drinking water or can be sprayed on to the beaks of birds. One does not have to handle the birds and innoculate them as with the other vaccine.
However, we have allowed this live vaccine to be used without realising the side effects for other birds in the countryside. We are allowing the Hitchener B 1 vaccine to be used, but I understand that there is agitation in poultry circles for the use of a stronger and more powerful vaccine called La Sota. I am told that if it kills a chaffinch, and the carcase of that bird lies on the land and eventually rots, the virus will continue to live in the feathers for a long time.
I think that the Minister in the previous Government has a great responsibility, because, in 1965, 78 per cent. of all the poultry flock of Great Britain was vaccinated, but at the time of the last election, when the right hon. Gentleman went out of office, the proportion vaccinated had fallen to 53 per cent. The right hon. Gentleman had a fine record in animal health. We admired the way in which he handled the outbreaks of foot-and-mouth disease, but we do not think that in June, 1970, the right hon. Gentleman faced the issues, or had at the top of his desk when he went out of office the figures showing the falling off in the vaccination of the poultry flock.
I hope that in winding up the debate my hon. Friend will deal with one other issue of animal health, and that is the success of the brucellosis eradication scheme. There is not one housewife in the country who does not support the mammoth efforts of the Government to get rid of this filthy, pernicious disease.

Many farmers are hanging back because it is known by the farming community that heifers or cows treated at a later stage with S19 vaccine tend to give a higher reading. That, combined with the unfortunate amendment made by Lord Burton about selling cattle, has given rise to the feeling, is it worth going in for the scheme? Most people, after the first brucellosis test, have been pleasantly surprised at the very few failures they have had. I hope that that can be put about and that the greatest possible encouragement can be given to people to go ahead with the scheme. The financial incentives are good, and auctioneers can, do a lot to help by making it clear that they intend to make their markets brucellosis-free as soon as possible.
For the rest, I think that for hon. Gentlemen opposite much of this debate has been a sentimental requiem for the phasing out of the deficiency payments system. That system was excellent when world food prices were falling and food was coming to this country at a cheap rate. Today world food prices are rising, and there is a world shortage of food. Food is expensive here because it is expensive throughout the world.
In this country we have bred a large urban population, many of whom think that because they live in the centre of London, or Birmingham, or Manchester, they can be divorced from bad harvest, bad weather, plant disease, and all the other troubles of agriculture that are affecting many countries. It is because of those factors that food prices are rising here and there is nothing that my right hon. Friend can do about it beyond continuing to give encouragement and confidence to British agriculture so that we become less dependent on imported foodstuffs.

7.43 p.m.

Mr. Gavin Strang: I am pleased to follow the hon. Member for Gainsborough (Mr. Kimball). He made a number of useful technical points which are I am sure of great interest to hon. Members present. I cannot agree with the hon. Gentleman's conclusions about the winding up of the deficiency payments system.
In the course of my brief remarks I want to deal primarily with some of the points made by the Minister. The right hon. Gentleman made a most amazing


speech. It was contradictory, and at times it was positively absurd. The major plank of the Government's election platform was their promise to reduce prices, or at least to reduce the rate of increase in prices. That is a fact, no matter what the Minister says, and it is worth recalling that in the 12 months preceding June, 1970, food prices went up by 6·2 per cent., whereas in the eleven months since the Government came to power food prices have gone up by 10·4 per cent. In other words, after a year of this Government food prices will have gone up almost twice as fast as they did in the last year of the Labour Government's term of office.
What does that mean in global terms? If we consider the gross annual consumption of food, we find that in June of last year a total of £7,500 million—a figure which I have extrapolated from the previous year's production—was spent on food. To buy the same amount of food in June of this year, it will be necessary to spend an additional £900 million. Thus, under this Government, food prices have gone up by £900 million, no less.
But, of course, it is not the global figures that are important. What is important is the effect on the low wage earner and the pensioner. If we assume that in June, 1970, the average household of two pensioners spent 38 per cent. of their budget on food, we realise that their food cost £3·8. To buy the same amount of food today they have to spend £3·40, and it was amazing to listen to some hon. Gentlemen opposite last week trying to make out that the forthcoming increase in the pension was a great increase because it was the largest ever. Set against the increase in food prices, and against the increases in the prices of other goods, the increase in the pension is totally inadequate.
I cannot agree with the hon. Gentleman when he suggests—it seems a crazy analogy—that the present deficiency payments system is responsible for the low wages of farm workers. If we change over from the present system, we on this side of the House will remember that opinion, and will expect the Government to ensure that farm workers' wages rise very much faster than those of other workers. It is worth noting that from

June last year to February of this year the earnings of farm workers went up by 1·3 per cent., whereas the earnings of other workers went up by 7·9 per cent.
The Minister may say that some of the factors affecting the increase in food prices are outwith his control, but the fact is that the Conservative Party fought the election on a false prospectus. Hon. Gentlemen opposite claimed that they would take action to reduce food prices yet, if we exempt the reduction in S.E.T., we realise that the Minister has done nothing to try to contain the increases in food prices. The Minister will no doubt say that it was not his view that food prices would not rise, and that we ought to have realised, as he said only a short time ago, that the statements about food prices were not meant to be taken seriously.
Last night I went to the Library to try to find the Minister's pre-election speeches, but I could not find any copies of them. I assumed that they had all been removed so that they could be rewritten in the light of the statement that had been made. I thought that they had been taken away so that those bits of his statements which rather naive Members assumed to be serious policy commitments could be deleted, but I have changed my view. Having heard the Minister's description of the election campaign, I can only assume that he was not in the country when it was fought, and that that is why there are no copies of his speeches in the Library.
The Minister is right to say that the Conservative Party has a mandate for the changeover from the deficiency payments system to the levy system, but his party does not have a right to seek to discredit the policy which we have pursued since 1947. The Minister himself paid tribute to the great progress that the industry had made. In fact, he went so far as to say that if other industries had made the progress that agriculture had made, we would not be in our present difficulties. He cannot have it both ways. He cannot say that the industry made great progress and also that the support system has been completely wrong. We have had very good value for money from our support policies.
On 8th June, I asked the Minister for the amount of money which we have spent each year on agricultural support


expressed as a percentage of the total level of agricultural production and the total food consumed. I will not bother hon. Members with the details, but the cost of this policy in relation to the food produced and the increase in the amount consumed has been going down in recent years.
Hon. Members opposite have sought to pretend that there is no basic difference between the policy which they are about to introduce and that of the last Government. There is a fundamental difference between using import levies to contain the Exchequer commitment and abolishing deficiency payments in favour of making farmers rely entirely on prices maintained by import levies. The deficiency payment simply contains the market from falling too low, so that the Exchequer does not have to bear too high a cost. I believe that the best policy for British agriculture is a judicious combination of import prices and deficiency payments. But that is quite different from what hon. Members opposite are proposing, which is to abandon the guaranteed price.
They seek to give the impression—my hon. Friend the Member for Waltham-stow, West, with whose views I largely agree, also believes this—that the farmers welcome this proposal. The English N.F.U. may welcome it, but farmers in my country do not welcome this change, and the Scottish N.F.U., which is closer to the grass roots, does not welcome it.
The most recent edition of the Scottish Farmer says:
The changeover could bring about a realisation that the agricultural policies pursued in this country, allied to our system of land tenure and the absorption into industry of practically the whole of the working population, have left our farming in far better shape to face the venture into Europe than it would have been had it been more feather-bedded.
That is a very sensible view. There is no doubt that farmers have benefited enormously from the system of guaranteed prices. I agree with my hon. Friend the Member for Walthamstow, West (Mr. Deakins) that the farmers and the farmworkers will live to regret the day that these guaranteed prices were removed.
I do not regard the E.E.C. common agricultural policy as an obscenity, but nor is it suited to our agriculture. It falls between these two extremes. In the light of the problems which the Commission

had to face when they set out about formulating the policy, the policy is not unreasonable. They seriously considered our policy of deficiency payments and the main reason that they did not introduce it was that they have so many small producers: they would have had to have a bureaucracy so massive that the scheme would have been virtually unworkable.
It is likely that, in due course, they will change over to this system, as my right hon. Friend the Member for Workington (Mr. Peart) said. The experts in the Commission make the point that, if they introduce the Mansholt Plan on a substantial basis and reduce the number of producers, the situation will change and they may move over. When they become more self-sufficient and less dependent on import levies—or when the levies begin to have less influence on the market—they may gradually change to a deficiency payment system.
The hon. Member for Weston-super-Mare (Mr. Wiggin) said that there was a lot wrong with the E.E.C. agricultural policy, and gave as an example the farmers demonstrating in Brussels. I cannot disagree with that, but the farmers, misguidedly, were demonstrating against Mansholt. What the E.E.C. Commission have been trying to do is to hold prices, to bring them more into line with world prices. That would have been acceptable to the farmers and they would not have suffered so much if the Mansholt Plan had been brought into operation as Dr. Mansholt wanted.
But the Council of Ministers would not agree to this, so, ironically, the farmers demonstrated in Brussels against Dr. Mansholt, when they should have been demonstrating against their own Governments, who had refused to allow the introduction of the Mansholt Plan which would have avoided the hardship to which many of them have been subjected while the E.E.C. has been trying to hold its prices.
It is significant that the farmers were demonstrating in Brussels. They now realise that major policy decisions, affecting particular farmers throughout the whole of Europe, are taken in Brussels and no longer in their member States. That will be the same if we join the Common Market.
Of course the common agricultural policy is totally unsuited to British agriculture, and we must see it as a price of entry. The pro-marketeers do not strengthen their case—I do not necessarily disagree with it—by trying to pretend that this policy will benefit us.
The Scottish N.F.U. has taken a strong stand on production grants for hill farmers. The Minister's written reply on 7th April was not adequate. He was asked
… if he will list the safeguards for hill farmers if Great Britain joins the Common Market.
He replied:
Whether we enter the Community or not, it is impossible to guarantee the future of specific subsidies but in the event of entry our farmers would gain access to an extra market of some 200 million people …"—[OFFICIAL REPORT, 7th April, 1971; Vol. 815, c. 210.]
Our production grants would be deemed by the Commission to distort competition. They have broadly three guidelines when considering production grants. A production grant is acceptable, first, if it is to encourage structural reform, second, if it is a temporary grant to improve a farm's viability—perhaps by some change in the management system—and third, if it is designed to encourage farmers to obtain income from other industries—for example, by encouraging them to move into tourism and build hotels.
Many of our production grants do not conform to these guidelines. That is why, when negotiations are completed, we hope that the Minister will give a clear statement of the position. When we go in, we shall have to inform the Commission of all our subsidies. They have told Governments to remove production grants and Governments have done so.
It is no use pretending that this is not important. Of course it is, and so is a whole host of other factors—marketing boards and so on—which will have to be clearly spelled out by the Minister if the Government expect us to support them in their venture into Europe.
I reiterate the need for confidence in the industry. However, it is not true to say that farmers have suddenly gained new confidence in their future. The reason why they have not been more

vociferous in their criticism of the Government is that they have had a reasonably good year—nothing to do with prices but largely because of the weather—and that the major issue facing them at present is the Common Market. They have been waiting to see what the Government decide before commenting to a great extent.
We can already see that the Government are not looking at agriculture in the way they should and are not treating it differently from other industries. They are subjecting it to their doctrinaire policies. For example, we have the change from grants for capital investment to tax allowances, and one appreciates what a retrograde step that has been when one thinks of purchasing tractors and similar equipment.

Mr. Wiggin: Is the hon. Gentleman unaware that it was the Labour Party which changed the system? We have merely changed the system back to what it was in 1964.

Mr. Strang: This change had nothing to do with agriculture. It was made at the same time as the Chancellor made various other changes affecting the economy.
The same applies to the advisory services. The Government are already cutting them, not because to do so will help agriculture but because of their political dogma. The Minister is on record as saying that farmers can get advice from the big combines, but fertiliser or feed firms should not be relied on for advice. In any event, these firms are slashing back on their own advisory services.
When the Minister repeatedly says—he said it at the Farmers' Club in London—that agriculture must stand on its own feet, he must appreciate what a nonsensical statement that is. It cannot stand on its own feet. We must support it in the way we have done up to now, by deficiency payments and guaranteed prices, enabling the burden to fall on the Exchequer. The alternative is to force up food prices, with the burden falling on the consumer, with all the implications that that has for the pensioner and the lowly paid.
The farmers, farm workers and consumers will regret the doctrinaire policies which the Government are applying to agriculture.

8.2 p.m.

Mr. Charles Morrison: The hon. Member for Edinburgh, East (Mr. Strang), like a number of his colleagues, began by referring to food prices and by accusing the Government of not keeping their promise. I remind him yet again that the Conservative manifesto said:
The Labour Government's policies have unleashed forces no Government can hope to reverse overnight.
That still holds good, though we have already upheld no less than 79 of the promises we made at the election. I am sure that by the time we have completed our programme for a whole Parliament we shall have carried out all our promises and will be looking around for new ideas to put into practice.
I appreciate that a number of hon. Members wish to take part in the debate and I will therefore be brief and refer to a few points in particular, whereas I would otherwise have dealt with a number of issues.
The hon. Member for Edinburgh, East went on to say that there was no confidence in the industry. I do not believe that to be true, though I question whether there are any farms in his constituency. I do not think there are. I assure him that among the farmers in Wiltshire there is far more confidence in the future than there has been for a number of years.
Against the background of unprecedented cost increases, my right hon. Friend has done a remarkably good job in persuading his Cabinet colleagues to provide enough money to cover those cost increases. This has demonstrated better than anything else the importance the Government place on a thriving agriculture industry. This is equally demon-stated by the reduction in S.E.T. and capital gains tax.
In discussing the question of the hill sheep subsidy, I should, perhaps, declare an interest, as my hon. Friend the Member for Gainsborough (Mr. Kimball) did, in that I am a hill farmer, though in another part of the country. There is no doubt in my mind that with the assistance of the hill sheep subsidy, much hill land has become, and remains, economically viable for the breeding of sheep. On the other hand, the economic viability of sheep in some hill areas is highly doubtful. Lambing percentages in some places are very low indeed. Sheep barely worthy

of the name are being kept in certain areas solely to attract subsidy.
Has my right hon. Friend considered the possibility of commuting the hill sheep subsidy, perhaps over a period of 10 years, in exchange for the clearance of the sheep or, as an alternative, to providing those farmers on the most marginal hill land with capital which they could use for, say, winter shelter? If there were more winter shelter available in some areas the more marginal hills would become more viable. Hills which became bare of sheep could revert to their original rôle of supporting red deer, or, alternatively, they could be used for growing trees.
Since the country will shortly have been cleared of foot-and-mouth disease for three years, it may be possible to export venison to the United States, where I understand it is a highly sought and expensive commodity. This may be a useful export which could be exploited in some of these areas, and I trust that this will be considered by the Department.
The question of fowl pest was also mentioned by my hon. Friend the Member for Gainsborough. I welcome the setting up of a committee of inquiry into this matter and the fact that it is to contain some independent members. I have no doubt that its report will be of great assistance. There is another aspect of fowl pest which should be examined. It is that this disease does not affect only domestic poultry. It also affects pheasants and pigeons and it has spread to some other birds of prey. There are rumours that it also affects some wild birds.
It seems that when the disease does affect wild birds it loses its strength quickly. I gather that whenever it has broken out among wild birds it has been clear that it started among and was passed on by domestic poultry to the wild birds. I gather that there is no evidence that wild birds have passed the disease on to poultry.
However, there must be a fear at the back of many people's minds that this might be possible and that the disease could become endemic among wild birds. This would, of course, make the control of fowl pest among domestic poultry infinitely more difficult. In addition, the attractions of the environment would be


considerably threatened. These fears can, of course, be exaggerated. I trust, nevertheless, that my right hon. Friend will give favourable consideration to placing on the fowl pest committee of inquiry a person with particular interest in the environment.
I seem to have been referring a good deal to wild animals. In recent years a major concern has been brucellosis, foot-and-mouth, ulcerated dermal necrosis in salmon and trout and fowl pest. With modern farming and increasingly high concentrations of animals, I fear that that list will have additions as time passes. Yet all those diseases affect wild as well as domesticated or farm stock. Is my right hon. Friend satisfied that adequate consideration is now being given to the interaction of animal diseases between wild and domestic stock? I hesitate to suggest that there should be yet another standing committee. But this matter should be borne closely in mind.
Apart from the recent depressing weather, during which it was a gloomy sight to see hay floating in fields in Wiltshire in the middle of June, which is much more reminiscent of the west coast of Scotland in September, the two big worries of farmers in my constituency concern the Common Market and the Restrictive Trade Practices Act. Their worries about the Common Market stem almost entirely from uncertainty, which is bound to exist until the terms of entry are published and, more important, explained. I hope that when the terms are published, my right hon. Friend and his colleagues will make every effort, again and again, to inform farmers of the terms and what they mean. Even if farmers or other people should happen to disagree with the terms, it is much more important that they should disagree from a basis of fact and knowledge rather than emotion. Being critical for the moment, it is possible that the Government can be most criticised for their lack of explanation of policy.
I turn to the Restrictive Trade Practices Act. For a number of years Governments have been stressing repeatedly the vital importance to the agriculture industry of improved marketing, stability of market and quality of produce. In or out of the Common Market, marketing

will become even more important than it has been. Conservative policy for the future is based on a market return and the same is true of the Common Agricultural Policy. Yet existing restrictive trade practice legislation seems to run counter to the National Farmers' Union desire to give guidance and leadership to farmers and to the Government's exhortation to the N.F.U. to give that guidance. Furthermore, the N.F.U. is inhibited at present in challenging decisions made in the Restrictive Trades Practices Court and in attempting to defend any practice due to the enormous costs which are apparently involved.
I hope that my right hon. Friend will give very close consideration to the question of the Restrictive Trade Practices Act, because that would be of benefit not only to the agricultural industry but to the public as a whole who will benefit from orderly marketing.

8.14 p.m.

Mr. James Johnson: In deference to your wishes, Mr. Deputy Speaker, I will watch the clock carefully and cut short my speech. If I had only one minute, I would rise to testify to my utter disgust with the speech of this Minister this afternoon. He is the right hon. Member for Lowestoft, a fishing port, and in his speech he did not mention the word "fish". This is a debate about the Department of Agriculture, Fisheries and Food. Fishing is often called the Cinderella, but we have an ugly sister sitting on the Government Front Bench today, who should have been speaking for the people he represents concerned with the fishing part of his Department.
We are saddled with a Government which we do not like, but I thought that at least we had a Minister, whom I know is a good fisherman, who knew something about fishing and would speak up for us and say something about it. He may not know much about peaches, but he knows an awful lot about fishing. Why could he not talk about any policy changes in fishing? Are there to be any or have we inertia? We have done very little since the Government came into office.

Mr. Prior: The hon. Gentleman must bide his time a little longer. Certainly it is out of no disrespect to the fishing


industry that we have not discussed fishing today. We have concentrated on agriculture and food. Before long there will be other occasions when we can discuss fishing at great length.

Mr. Johnson: I ask the right hon. Gentleman about one or two matters that we have not discussed. I take, for example, the matter of the future of the industry and of subsidies. The Minister knows as well as I, and he has been asked Questions about this, that on the whole matter of help to the fishing industry in the coming year he is due to make a statement about subsidies in mid-1971.
I asked a Question on 7th June about the terms of the subsidy for the deep sea fishing fleet which will come into operation in the middle of this year. The Answer then was that the Minister would be meeting representatives of the industry on the following day. That was 8th June. I was hoping that we might have some indication today of what had happened at that meeting. That would have been helpful to the leaders of the industry in the constituencies for which the right hon. Gentleman and I represent. Why could he not say something about that?
The right hon. Gentleman came to Hull on 8th September last year and told the Press then that he thought that 1971 would be a year of declining catches, a bad year for fishing, and that there would be over-fishing in the North-East Atlantic. We could have had a statement today about how, in mid-1971, he views the statements he made last autumn in Hull on the fish dock. These are important views which should be available to the Press in the fishing ports.
In Hull last weekend I spoke to skippers, owners, union leaders and managers of cold stores for fish. They are all anxious about the future. They want the Minister to say something about the future of the industry and his intentions.
Although the Minister is a Member for a fishing port, for a long time it has been his declared intention to cut fishing subsidies. We now see that we are facing a future in which we shall lose subsidies in agriculture in the same way. The Minister owes it to those of us who represent fishing ports and the associated

industries, to make a statement on occasions like this, when we have a debate-some people call it an inquest—on his Department. He might also have mentioned two serious matters affecting the industry; first the bombshell that we have had about Iceland wishing to extend her fishing limits to 50 miles, which for ports like Hull and for my union, the General and Municipal Workers' Union, can mean unemployment, with 8,000 members on Humberside who are involved as fish dockers, in the ancillary industries connected with fish meal, cold stores, Bird's Eye and the like. Hull and Grimsby catch nearly 40 per cent. of their fish in those very fertile Icelandic-banks, mainly cod and haddock. The Minister should say how he views this matter and what he intends to do to safeguard the industry in the future Iceland will take up this matter at the United Nations—we have sympathy for her in some ways—but undoubtedly we shall lose these banks after the International Conference on the Law of the Sea in 1973.
Some people may think that those of us who come from Humberside are near to apoplexy about this. We are worried to death. Men like Austin Lang and Tom Boyd—the President of the Owners Federation—are intensely worried, as are our union colleagues and the workers on the fish dock. I beg the Under-Secretary to say something about this later and not to ignore this important segment of his Department's activities. So far we have been completely ignored. It is disgraceful that a Minister who is a Member for a fishing port did not utter the word "fish" in his speech.
As to the Common Market, although I believe that the deep sea trawlers on the Humberside are the economic leaders of the industry, nevertheless it is the inshore men whose anxieties appeal to public opinion most. The inshoremen have mounted a skilful campaign, both inside and outside the House, for their cause; and their fate, just like that of New Zealand, is more charged with emotion potential than is anything to do with Commonwealth sugar in Fiji, Mauritius or anywhere else.
As a Hull Member I have a serious objection to one thing which is happening in the Common Market negotiations. I want the Government and the Minister for Fisheries to stand up and fight for


our deep sea boats to get into the 6–12 mile belt on the other side of the North Sea. If the Government are to give away the 6–12 mile belt on this side to smaller vessels from Belgium, Holland, Denmark and France, I want this Minister to fight for my vessels from Humberside to get into the 6–12 mile belt off Norway and elsewhere on the other side.
I hope that the Minister will think seriously about this matter. If he does nothing, not only shall we be in danger but we shall get the worst of both worlds. If he does not fight for his fishermen, his name will be execrated in all our fishing ports. I think that he will fight. I appeal to him to get on with his job at his very earliest convenience.

8.22 p.m.

Mr. David Mudd: I want to expand on a theme which has been touched upon—the very important but often overlooked subject of fishery protection. This is, perhaps, one of the most overworked services provided for the British fishing industry and certainly the most under-publicised. I speak in the hope that my right hon. Friend will seriously take note of my comments and will, in turn, impress upon my noble Friend the Secretary of State for Defence the urgency of examining once more the question of the total establishment and the deployment of the Fishery Protection Squadron.
I need hardly impress upon the House the fact that the members of the distant-water fleet welcome the arrival of the occasional Western fleet frigate which joins them with medical and technical assistance and, above all, with the moral supremacy of its presence backing them up as they go about their lawful fishing tasks.
In home waters there is continued dependence by the inshore fishing industry on the squadron's six coastal minesweepers which each year have had 110 ship-days at sea patrolling, surveying and looking after the industry's problems. They work well. They work as a coordinated United Kingdom force. All too infrequently they are backed up by the resources of helicopters and fast patrol boats.
One cannot speak too highly of the exemplary character and the calibre of

the officers and men of the Fishery Protection Squadron which, in true James Bond fashion, has its rôle somewhat disguised by being submerged almost anonymously as the Fourth Mine Countermeasures Squadron. All commissioned officers to this important rôle are men of great ability. Their specialised training involves them in fishery matters and, above all, in the legal aspects of their work.
As right hon. and hon. Members will know, friction and incidents between our own fishermen and those of Iceland and of Continental countries are far from unusual, mainly due to different methods, different gear, and different fishermen working under different systems and working in the interests of different nations. These are differences which have existed, which do exist, and which will continue to exist whatever agreements may or may not be reached internationally in the matter of fishery limits with the E.E.C. or with Iceland.
It has been found from experience that different methods of trawling on the same grounds will usually result in unfortunate incidents, such as vessels towing trawls across drift nets or through seine net warps. Controlling such incidents and sorting out the inevitable subsequent disputes is a full-time job on congested fishing grounds and it taxes the skill, the time, the ingenuity and the wisdom of the commanding officers of our Fishery Protection Squadron vessels.
To these duties must be added those of anti-poacher surveillance duties and checks on net mesh under the Sea Fish Conservation Act, 1967 and the correct stowage of gear under last year's legislation.
The fact that this tiny Squadron of only six coastal minesweepers has collectively made arrests at the rate of one a fortnight every fortnight since 1964 will indicate to the House the rate of violation of existing British fishery limits.
In the light of the recent indication of Iceland seeking 50 miles of limits, and in the light of the attitude of the Common Market countries to British inshore fishery limits, I must impress upon the House the need to strengthen our resources of fishery protection. These resources must be strengthened, on the one hand because our distant water fleets are


threatened by the sabre-rattling of Icelandic gunboats and, on the other hand, because our inshore fishermen are threatened by the sabot rattling of French and Belgian poachers.

8.27 p.m.

Mr. David Clark: I hope that the hon. Member for Falmouth and Camborne (Mr. Mudd) will forgive me if I do not comment on his remarks.
The comments by the hon. Member for Torrington (Mr. Peter Mills) on the tractor industry in particular were most inappropriate and a little irresponsible at a very time when that industry, both at home and overseas—[Interruption.]—I realise that the hon. Gentleman has no sympathy with the tractor industry firms or with those who work in them.

Mr. Peter Mills: If the hon. Gentleman knew as much about the industry as I did, what it has done about safety cabs, and the amount of money it has tried to make out of them, he would realise that what I have said is absolutely true.

Mr. Clark: The hon. Gentleman said that he was glad that there were tractors which were not being sold. That implies that there are men being thrown out of work at almost all the tractor plants in this country. The Minister who is to wind up the debate tonight owes it to the tractor men and the people concerned with the agricultural machinery industry to say something about that statement. I still regard it as very irresponsible.

Mr. Peter Mills: Reduce the prices.

Mr. Clark: I should like to divert my attention to a more fundamental aspect of this debate, something which has not been touched on for a while. We have been talking about agriculture, but we have neglected food. One of the main duties of the Minister concerns food. I find it most interesting to listen to hon. Gentlemen opposite on the subject. Some of them put up their hands and say, "It is nothing to do with me, because I stand by the Conservative Party election manifesto, which said categorically that we would introduce the agricultural levy mechanism, which would force up the price of food." That was fair enough. They even spelled it out.
The right hon. Member for Grantham (Mr. Godber), as the then official Opposition spokesman for agriculture, made the point that if the Conservatives' policies were implemented there would be an increase in food prices of l½p per £ per year. One of the great difficulties has been that the Conservative Party fought the election facing both ways on this. There seems to have been no liaison between the Prime Minister and the spokesman for agriculture. I appreciate that there is a great deal of controversy about the famous speech about reducing the rise in prices at a stroke. There is debate about what the Prime Minister said and what he meant. But if we look at the other statement he made at his Press conferences running up to the General Election we see that there is no doubt about what he said.
I suspect that what happened was that the Conservative Central Office had done a private opinion poll and found that the subject of prices would pay dividends and the Prime Minister emphasised prices.
In order that hon. Members will not think that I am generalising, let me be specific and quote what the Prime Minister said on 15th June. He said at his news conference:
We can deal with prices. We did it before and we will do it again.
That is quite definitive. He was giving the people of this country a lead. On 17th June, the day after his "cutting prices at a stroke" speech, he said that he had the policies which would get output up and prices down. These statements are quite definitive. Even the Minister of Agriculture cannot claim that the people should not have taken him seriously. The right hon. Gentleman and his party have a very firm commitment on prices. Even taking into account the difficulties of world trade, they have fallen down on this commitment badly. When we realise that the rise in food prices this year will be 12 per cent., or 2s. 5d. in old currency in every £1, we can see that the proposed rise for old-age pensioners, for example, will be dissipated before they get a chance to receive it.
The rise in prices does not affect only the housewife. It goes through our sysstem. It affects the hospitals, industry, in the canteen, and school meals, because I believe that it is the policy of the Government that schoolchildren should pay


the full economic price of school meals. The idea that competition will bring prices down is not valid and will not work.
I move from prices to hill farming. The right hon. Gentleman knows how vehemently I feel about his decision to wind up the North Pennine Rural Development Board. As the representative of a constituency with many hill farmers I know that they were watching experiments in the North Pennines with great interest
In forestry, too, the Minister has failed. He set up his policy committee to look into forestry and we have great hopes of the results. On the other hand, he seems not to have been able to allay the fears of the forestry workers in such fields as the Forestry Commission's policy in buying land for planting or the use of contract labour, or, perhaps even more about the use of herbicides, especially herbicide 2,4,5-T. This herbicide was suspended but the Forestry Commission have had the go-ahead from the Ministry to resume spraying. This is to be regretted. We are not concerned here only with the health of the foresters—although that is important enough; indeed, it is vital—but do we know the effect of the herbicide on the flora and fauna? Does the Minister realise that, in 1969, the United States Department of Agriculture withdrew the use of this herbicide because it found that rats in the Cancer Institute after treatment with it were contracting cancer? There are all sorts of hidden points in this unknown world, and in this, as in his forestry policy, the Minister is guilty.
I should have liked to develop these points further but will not do so because of the time. But wherever we look—whether it be at prices or at agriculture generally—we see that the Government's policy does not hold water. I hope therefore, that the Motion is carried.

8.35 p.m.

Mr. Robert Boscawen: The debate has made clear the split personality of the Opposition on food prices and food production. The hon. Member for Colne Valley (Mr. David Clark) was not free from it, although I enjoyed what he had to say about forestry Throughout the term of their office, the last Government failed in their juggling act of

trying to maintain a strong and healthy agriculture on weak farm-gate prices. That was their big failure and that is the reason why they, if anyone did, destroyed the credibility of the deficiency payments system.
I welcome this debate if only to show that unreasonably weak prices to the farmer are a false economy. This went on for far too long—for six years, until my right hon. Friend held his special review last autumn. Indeed, it went on even before 1964. Even the Conservative Party was slow to wake up to the fact that weak prices to the farmer in the end bring higher prices to the consumer.

Mr. Charles Loughlin: What does the hon. Gentleman mean by "weak prices to the farmer"?

Mr. Boscawen: I will explain to the hon. Gentleman when I am talking about the milk producers in my constituency.

Mr. Loughlin: Tell us what you mean.

Mr. Boscawen: I will come to it when I show how the milk producers have been under-recouped for six years under the Labour Government.
The right hon. Member for Workington (Mr. Peart) told us one of the aims of his policy soon after he took office in 1964. At the time of the annual review in 1965, the Labour Government's aims were, he said
… to promote developments in agricultural policy which … must be made if the industry is to go on increasing productivity, and so improve its income while reducing its need for Exchequer support."—[OFFICIAL REPORT, 17th March, 1965; Vol. 788, c. 1287.]
Those were admirable and brave words, and we would support them. I am sure that the right hon. Gentleman had the support of the industry at the time. What did those brave words lead to? Did they lead to stability in the industry? Did they give farmers in general—particularly the smaller tenant farmers in my area—a fair living? Did they give a fair wage to the farm workers? Did they encourage expansion, to which there was so much lip-service by the last Government? Did they reduce the Exchequer support? If they had done these things and had given the dairy farmers a fair living with a fair and reasonable price for milk, the price of milk would not have had to rise so rapidly this year.
In the five years 1965–70, the guaranteed price for milk was 4·41 old pence. In the price review last year, the then Government gave an extra last fling of two old pence per gallon on top of that. That last increase of two old pence is what the present Government have had to put up with amongst the price increases during the past year, as my right hon. Friend has pointed out. We have had to cope with it amongst the price increases of the past year. The 4·41 old pence increase in the guaranteed price of milk nothing like recouped costs to the industry during that period. There was a massive under-recoupment right through those six years, and it is this under-recoupment that my right hon. Friend has now made good.
My dairy farmers are getting something like 5 old pence more today than they were a year ago. That is why the price of milk has increased to the consumer. Had the price increased steadily over the years of the last Government, as it should have done, the farmers would have had confidence in the future and would have expanded as the last Government wished them to expand, and the price would not have risen as much as it has.
The cheese makers of my constituency are among the finest in the world but they have been in the greatest difficulties because the last Government allowed dumped Dutch and Irish cheese to come in and were extremely dilatory in reaching agreement with those countries in order to stop that dumping. As a result, some cheese makers were forced to lay off production for months on end. There was no incentive to put more capital and more effort into increasing production in this industry, and we shall suffer from that for some time to come.
If hon. Gentlemen opposite are complaining about the price of milk and dairy produce, they should try to understand the root causes of the price increase, and I am glad that the Minister this afternoon gave some of the reasons. I also welcome the beginning of the restoration of confidence in the industry. Of course it will not come overnight. It will be some time before full confidence can be restored, but the process is at least beginning. The farmers in my area are finding that the interim price review and the spring price review are making a deal of difference and are putting the heart back into the industry.
In my constituency there are some intensive production systems, and what interests public opinion there is the need to watch over the codes of practice for these intensive farming systems. The Conservative Party has given assurances in the past that it would watch carefully these codes of practice, but from time to time people need reassurance that the codes are being properly applied. I have been round to see the intensive farming units in my constituency, and I have been largely reassured, but the public generally need to be reassured by the Minister. To the credit of those who call for cheap food, they often cry the loudest against unacceptable conditions for the animals concerned. We have to keep a balance between the welfare of the livestock and the cost of production, but from time to time we need reassurance, especially now when there is likely to be freer trade with Europe. We must make sure that no livestock produced under cruel intensive conditions is imported into this country. I hope at the appropriate time my hon. Friend will give this reassurance.
I welcome this debate which has given my hon. Friend the opportunity to put the blame for the higher prices for food where it belongs, namely in the niggling attitude of right hon. and hon. Gentlemen opposite to the home producer. This created a loss of confidence in the Labour Administration and thus a great deal of blame lies with the former Government that we are not producing as much as we should today.

8.45 p.m.

Mr. Gwynoro Jones: Time does not allow me to delve too closely into the arguments put forward by right hon. and hon. Members opposite regarding the rising prices of the last year but I feel that certain statements are incontrovertible. One is that the rise over the last year is the highest in any year in modern times—probably close on double the figure of food price increases in the last year of the Labour Government.
Even though the Minister of Agriculture feels that the people of Britain should not have taken the Prime Minister's words in the way they did, the fact is that before the election the people of this country assumed that it was the policy of the Conservative Party if returned to power to do something about prices, and reduce


the rise. It is the duty of the Minister of Agriculture to accept that rising prices are in danger of getting out of hand.
We are not interested in attaching blame, but are more concerned with trying to tackle the problem. We have not today heard any argument put forward by the Minister about his future policy to curtail or control prices, or to carry out the election pledge to reduce prices; although I must confess that the "stroke" which was mentioned has now taken a period of a year and a few days.
One hon. Member opposite referred to the renewal of confidence with the advent of a new Government. Another hon. Member said that confidence was on its way back. I wish hon. Gentlemen opposite would make up their minds which it is. Certainly so far as Carmarthen is concerned, I am in close touch with the Farmers' Union of Wales and the county branch of the N.F.U. in my constituency, and I know that their confidence is far from reaching a stage of satisfaction about the present situation.
Confusion has been one of the great trade marks of the present Government in its first year in office. There has been confusion over development areas, confusion about economic and fiscal policy, and confusion about agricultural policy—at a time when the levy system is being introduced. Many farmers in my constituency are concerned about the effect of the levy system upon them and they wonder what will be the consequences if they lose the subsidy or production grant. Neither the Minister of Agriculture nor his Department has said anything to confirm or deny the dangers of the situation and to allay the concern felt by many farmers. Confidence is also being withered away about what is being said about the Common Market—or, perhaps more correctly, about what is not being said about the Common Market.
At a time when negotiations are said to be coming to an end, when people are predicting that the formalities are over and we are practically in the Community, the Minister has said nothing about the possible consequences for the hill farmer, the marginal land farmer or the upland farmer. There has been a great increase in uncertainty and a failure to tackle inflation. The Secretary of State for Social Services admitted

today that the purchasing power of the pensioners' income had decreased by about 50p in one year. The increase which is yet to come into effect has thus been almost halved. The pensioners will have to live for another two years without an increase. On present trends the value of the September increase in real terms will have withered away by early 1972.
This inflation has also caused concern to the N.F.U. Commenting on the Review on 17th March, the President said that the guaranteed prices of the major farm products were to rise by an average of 9 per cent. over their 1970 levels. He then went on to quote cost production increases in the same year. These were: foodstuffs, up 20 per cent. to 25 per cent.; machinery and tractors up 10 per cent. to 15 per cent.; fuel and oil up 17 per cent.; transport up 10 per cent.

Mr. Peter Mills: Whose fault?

Mr. Jones: The hon. Member says, "Whose fault?" but the Government have been in office for a year and a few days now. The time must be coming when they can no longer blame someone else. It is about time that they accepted responsibility and stopped blaming anyone else, be it the wage earner, the previous Government or the trade unions. The Minister is the Minister for Agriculture—

Mr. James Johnson: And fish.

Mr. Jones: And fish, as we have pointed out to him.
Turning to the confusion which emanates from the introduction of the levy system and the impending entry of this country to the Common Market, I would like the Under-Secretary to answer some specific questions about the Market which genuinely concern farmers, certainly farmers in Carmarthenshire, which is the second or third largest producer of dairy products in Britain, producing 60 million gallons of milk every year and providing £8 million for the local economy. Farmers are naturally interested in the future rôle of the Milk Marketing Board and the transport costs system. The Minister has a duty to tell us clearly what will happen to the present milk transport costs system if we enter the Market. I will not accept a statement saying that the problem will be tackled once we are in. The farmers


of Carmarthenshire want to know what will happen before they go in, before they pass judgment, before they decide whether the Market has any value to them.
Closely tied up with this is the monopoly position of the Milk Marketing Board as a purchaser. May we have an assurance that this position will be guaranteed? If it is not guaranteed the disadvantages to the farmers of Carmarthenshire will be great since they are so far away from the main centres.
The hill, upland and marginal land farmers in my constituency are also concerned. Here the question is: what is the future of the hill cow and hill sheep subsidy? Can we have an assurance about this, not a vague promise to look at the situation, or a suggestion that if we do not enter the Market the future of these grants and subsidies would be in jeopardy anyway? Let us have an assurance about the future of these subsidies and grants which, after all, have been the backbone of the hill areas for many years.
In the period 1966 to 1969, Carmarthenshire received £500,000 in the form of the hill cow subsidy. Will that continue under the present terms of the Treaty of Rome if we enter the Market? As I understand it, some production grants such as the fertiliser and lime subsidy are bound to disappear. In 1971, that subsidy is equivalent to £38 million. The calf subsidy is in danger under the terms of the Treaty of Rome. Other grants, such as the farm improvement and capital grant, which in 1971 provided £26 million to agriculture, might have a future in the initial stages, but it is bound to face certain difficulties in the long run under the Treaty of Rome. If I am wrong in my analysis, I hope that the Government will say so and assure us categorically that these grants will continue.
In the last few months, there have also been a number of trivial, puny Measures. One example is the decision about school milk. That will not only hit children between the ages of seven and 11. In the end, it is bound to affect our dairy industry. The Milk Marketing Board has made an assessment that it will cost the dairy industry something like £13 million in a full year. Then we have the abolition of the grants to rabbit

clearance societies. They may seem trivial to many people, but concern has been expressed by the Carmarthen society that it will lose an amount which last year was close on £7,000 and, over the 1965 to 1970 period, provided £25,000 in the county.
Another point which is causing concern is that of the compensation for reactors under the present set-up of the brucellosis scheme. Many hon. Members on both sides will pay tribute to the way in which my right hon. Friend the Member for Anglesey (Mr. Cledwyn Hughes) pursued this matter of the grave concern in farming with brucellosis. At the moment, the Government are adopting a wait and see attitude towards herds which are heavily infected.
A pamphlet entitled "Area Eradication of Brucellosis: Preliminary Information for Herdowners in Initial Areas and Extension Zones" says:
In mid-1972 there will be a review of early experience among heavily infected herds in Initial Areas to establish whether there is the need for additional assistance for owners concerned.
After mid-1972, will the Government recognise that farming has been faced with an undue burden? Will they consider a retrospective payment to those who will not benefit before the Government reach a decision?
Then there is concern about the compensation for reactors, which is £30 per head. In addition, the slaughterhouse figure will make it something like £70 or £80 per head. Surely the cost to a farmer of a replacement will be about £100, £120 or £140. There could be a loss here, and I trust that the Minister will look closely at the situation.
I should like to raise a great many other points, such as the man-days per annum requirement for grant eligibility which, for the small fanner, is far too high a figure. However, I will not pursue that now.
Another matter which I wanted to raise concerned the possible re-enactment of the Agriculture (Improvement of Roads) Act, 1955, which, in the period during which it operated, brought untold benefit at small cost to the rural areas.
Another point concerned the future of farming in Mid-Wales. It is all very well for the Government, for whatever reason,


to have abandoned the Rural Development Board, but it is their duty to tell us what they will put in its place. The farmers of Mid-Wales are looking for assistance. The Government cannot, on the one hand, take away assistance and, on the other, not tell us what they will give in its place.
With those few remarks, having due deference to your request, Mr. Deputy Speaker, I curtail my observations.

9.1 p.m.

Mr. Hamish Gray: I understand that the right hon. Member for Anglesey (Mr. Cledwyn Hughes) wishes to wind up the debate at five minutes past nine. I shall therefore be as quick as I can. I apologise to the right hon. Gentleman that the shortage of time will prevent me saying the nice things which I was going to say about him in my speech.

Mr. George Thomas: Take an extra five minutes.

Mr. Gray: I shall have to restrict myself to points which may not perhaps be so acceptable to the right hon. Gentleman.
It is appropriate that we should debate agriculture today, particularly as the Royal Highland Show commenced in Edinburgh and many of my constituents will be engaged there.
I am pleased to follow the hon. Member for Carmarthen (Mr. Gwynoro Jones), although I cannot agree with everything that he said. However, I should like to associate myself with his reference to production grants for hill sheep farmers. I emphasise that this is of vital importance, particularly in the Highlands of Scotland. It is interesting that in 1969 the total subsidy—winter keep, hill and upland sheep subsidy and hill cattle subsidy—amounted to £10·5 million. This is life-saving to the industry in these regions. I sincerely hope that every possible protection will be given to the hill sheep farmers in the E.E.C. negotiations. If these grants are taken away, it will be the kiss of death for the industry in my part of the country.
I should like to mention quickly what led to the state of apprehension in the industry at the time that the Conservative Government came to power a year ago. In 1968, 1969 and 1970 there had

been three Price Reviews. I pay tribute to the right hon. Member for Anglesey, although I had not intended to do so, because he did his best to make them reasonable Price Reviews. However, he knows that they were not good enough and that the desired expansion within the industry could not and did not materialise.
My right hon. Friend has produced a Price Review this year which has given tremendous encouragement to the industry. Indeed, the life-saving injection of capital which was given to the industry in October last year meant that £7½ million went to Scottish farmers, for which they will be eternally grateful. Indeed, many farmers in Scotland would have been bankrupt had it not been for the Government's assistance.
I turn now to consider what the National Farmers' Union said about some of those price reviews. We have had N.F.U. statements bandied about at will this afternoon. On 6th March, 1968, the President of the N.F.U., speaking about the Price Review of that year, said:
This Review does not mean '£52½ million more for farmers'. On the Government's own reckoning British farmers have to meet £68½ million of increased costs during the year. The deficit, £16 million, will have to be found by the farmers themselves. This means that unless productivity continues to increase, farm income will fall.
This industry at that time had increased its productivity three times more than the average for any other industry.
It is interesting to note what the N.F.U. said about the 1969 Price Review:
In denying British agriculture the resources necessary for expansion, the Government has completely failed to grasp the constructive opportunity provided by this year's Price Review to reduce imports".
It is also interesting to note than on 30th December, 1969, farmers were very angry and worried, and I quote again from the N.F.U.'s publication:
The reason for the present sense of frustration and anger among farmers is the fact that during the decade they have not shared in the general improvement in the living standards of the British community. In the ten years up to 1968/69, the real value of total personal incomes in the community as a whole has increased by 46 per cent. Farm incomes, on the other hand, in real terms have shown only a 7 per cent. improvement.
Those figures are indicative of the feeling that existed in the agricultural industry.
I hope that, like all good Conservatives, I keep my promises. I shall be as good as my word. It is five minutes past nine, and I therefore conclude my remarks.

9.5 p.m.

Mr. Cledwyn Hughes: I know that I speak for the whole House when I say that I regret the absence of the Parliamentary Secretary to the Ministry. The hon. Gentleman always takes part in our debates on agriculture with great knowledge and experience, and we wish him a speedy return to the House.
This has been the first full-scale debate on agriculture since the election 12 months ago, and I think that sufficient time has gone by since then for us to make a reasonable judgment of the Minister's stewardship of his responsibility not only for agriculture but for fisheries, for food and, indeed, for forestry.
The debate has been constructive and there have been very good speeches from hon. Members on both sides of the House, but, having sat through the debate, I have detected a note of apprehension and anxiety not only about food prices, which is natural, but about the future of the agriculture industry.
I congratulate, in particular, my hon. Friend the Member for Bromsgrove (Mr. Terry Davis) on his maiden speech. My hon. Friend made gracious and well deserved remarks about his predecessor and showed an intimate knowledge of his constituency. I know that hon. Members on both sides will look forward to hearing my hon. Friend again.
The Minister carries a great responsibility on his shoulders. During his year of office he has made certain decisions and taken certain steps that will decide the future of the industry for decades to come. This is a crucial time in the history of agriculture in this country.
My right hon. Friend the Member for Workington (Mr. Peart) was right to remind us that the history of the industry since the end of the war has been truly remarkable. It has become one of the most efficient—in some sectors the most efficient—in the world, whilst its labour force has been declining at the rate of 6 per cent. to 7 per cent. per annum, though that figure was down to 5 per cent. during the last four years, which in a sense is a tribute to the work

of the Labour Government. The drift from the land, although possibly still too great, has slowed down. Of course, there have been difficulties, as we all know all too well.
There has been a great deal of talk about lack of confidence during the years of the Labour Government and of the greater confidence that has returned with the Conservative Government. I say to right hon. and hon. Gentlemen opposite that their talk of confidence is illusory, that it is whistling in the dark. The Government must be concerned about the confidence of the whole nation and not just about one sector. The Minister must consider not only confidence in the farming industry but confidence amongst consumers, too. My advice to hon. Gentlemen, when they talk about confidence, is to take care, because I do not believe that at the moment the agricultural industry is looking with great confidence to the future. There is far too much uncertainty, and I shall deal with that as I proceed.
Taking an objective view, a quarter of a century after Tom Williams introduced his historic Act, one sees that from 1946 to 1970 there was a steady development of increasing production and productivity. In this successive Governments have played their parts, as have the N.A.A.S. and, above all, the farmers and farm workers. As a result, notwithstanding what some hon. Members opposite have said, we are producing more of the nation's food now than at any time in a period of peace.
This success is the envy of other countries, including the countries of the Six. We have done something which they have not yet succeeded in doing: we are increasing production of the right commodities in the right areas at the right price and with a much reduced labour force. We all know the agricultural labour situation in the countries of the Six and the problem of fragmentation of farms. Through our policies we have succeeded in overcoming these great problems, which is why we are an example to the world today.
This has been achieved by a specific policy—the policy which the right hon. Gentleman will now change. It is a policy of subsidies, of guaranteed prices and assured markets. The farmer has enjoyed a measure of security and the


consumer has enjoyed reasonable prices over a long period.
Many farmers have complained over about ten to 15 years—not just during the period of the Labour Government: that is another tawdry political point—about the return on their investment. This was not an easy problem to solve. I am glad that the Minister has initiated a study, I think he found the proposal on his desk when he entered the Ministry, into the industry's financial structure. But there has, on the whole, been security in the industry, and there is an efficient industry today. We must not denigrate our agriculture. It is this system, which by any standards has worked well, which is to be radically changed.
Under the old system, it was the taxpayer who bore the expense. Now, it is to be the consumer. This is the big change, and I admit that it is in line with a certain Conservative philosophy, and consistent with the views of the Minister, who has always said that the people of this country get their food rather too cheaply.
The hon. Member for Torrington (Mr. Peter Mills) in a characteristic speech—dramatic and inaccurate—said that we on this side did not believe in change. I would certainly not say that the system based on the 1957 and 1967 Acts should be preserved unchanged for all time, that it is "the laws of the Medes and Persians". Far from it; I tried to strike out in a new direction in the 1970 Review and I have come to the conclusion that the farm review as we now know it should cover a longer period than 12 months. I had in mind a triennial review, with perhaps a brief annual look at the cost factor for purposes of adjustment. But we are to have a much bigger change than that. This is a fundamental departure from guaranteed prices to levies on imported foodstuffs.
The previous Administration made it clear that if we entered the E.E.C. on acceptable terms we would seek to adjust to the common agricultural policy, but the Minister has made the adjustment before knowing whether we are going in or not. This is where he has made his mistake. I believe that our policy, based on the 1947 Act, had many better features than the common agricultural policy. This has been proved in practice and

there are many people in high positions in the E.E.C. who agree with me.
Indeed many people in agriculture in the Community would like to turn to our system, but it would be extremely difficult for them to do so. I will not argue about who is responsible for the refusal to change the policy within the E.E.C., but our negotiators should have made a far greater attempt to bring their system a little closed to ours, because I believe ours is superior.
By our system we have controlled production and prices and increased efficiency where their system has failed. However, we are not debating the Common Market tonight and my final word on this issue is to tell the Minister that a bad mistake has been made in abandoning a successful policy in advance of the negotiations on agriculture with the E.E.C.
The Minister came to a good inheritance 12 months ago—[Interruption.]—and let us look at what he has made of it. My right hon. Friend the Member for Workington referred to the O.E.C.D. Report and I will not elaborate on it. The evidence that the inheritance was a good one comes from the right hon. Gentleman's own composition, this year's Annual Review White Paper. I did not write it. He is responsible for it. I am bound to commend it to a large extent because it is a good White Paper. It is a justification of the Labour Government's policies.
I urge hon. Gentlemen opposite, and particularly the hon. Member for Weston-super-Mare (Mr. Wiggin), to read it carefully. Paragraphs 28 to 34 show that the Selective Expansion Programme was doing well, though cereal production was affected by the weather. On pages 25, 26 and 27 we see how production has increased in beef, veal, bacon, ham and poultry meat. All inceased substantially over the years.

Mr. Jopling: What about mutton and lamb?

Mr. Hughes: I agree there has been a decrease. I readily admit that mutton and lamb production was a problem during my period at the Ministry. [Interruption.] Hon. Gentlemen opposite should remember that for years prior to 1964 the award for mutton and lamb by the then Conservative Government was a


minus award. We gave substantial awards on mutton and lamb, but this did not seem to have the desired effect at the time. The results may be working through now. These pages are worth studying because they show that expansion was going on.
I agree that growth in agriculture does not progress uniformly year by year. There are hazards, like the weather and disease. My right hon. Friend the Member for Workington had the foot-and-mouth epidemic—[Laughter.]—on his hands. Hon. Gentlemen opposite should come to Wales to learn what a sense of humour really is. We are dealing with serious matters. The foot-and-mouth epidemic obviously affected confidence in the industry to a very large extent, but my right hon. Friend handled the situation splendidly.
Then we had some extraordinarily bad sowing weather for three years. I agree that the Minister has had the fowl pest epidemic on his hands, but we would not seek to blame him for that. These hazards when they occur are bound to interfere with the normal progress of expansion. I ask the Parliamentary Secretary to say a word about the selective expansion programme. We should be told where we stand on that. Is there to be no guidance in the future? Is it to be a "free-for-all" on every commodity, no matter what the consequences? We have not been told. We who remember the pre-war period know that this could lead to a situation of glut which could destroy many farmers.
The 1971 Review was the last of its kind and future Reviews, either in or out of the E.E.C., will be quite different in character. I regret this. The Minister made a brief intervention on the "fallback" guarantee position, but the House should be told more about it. At what level will the Government fix it? When does the Minister consider that it will come into operation? There is considerable anxiety about this matter in the industry.
Taking the award of October, 1970, and the Price Review of this year, the awards on cereals, beef and pigs were reasonable and those on sheep were very necessary. I think the Minister took the right measures. I confess that I was less certain about milk, although something to offset costs was necessary. But the

October and March increase together was high, and we must bear in mind that sales of milk at farms are at a record level.
The maintenance of the right balance in milk production is one of the more difficult problems of the Minister. As he knows, excessive production can lead to acute difficulties on the manufacturing side. Does he propose that more butter and cheese should be produced here? If so, how much? This is a difficult balance for him to strike. Listening to some of the speeches of hon. Gentlemen opposite, they ought to be told by the Minister about his difficulties and any proposals for an increase in the production of butter and cheese, especially as we know that the Six, if we enter the Community, would certainly like to sell more butter and cheese to Britain. That is a fact of life that we have to face.
On the Price Review, the Minister knows that I disagree with the way in which he presented costs in this year's White Paper. He excluded certain matters which have been part of the costs in all previous Reviews, such as milk and eggs produced outside the standard quantities. The sum involved this year was a large one, £24 million. The Minister has subsequently said that he excluded this sum on legal advice. I accept that. But it made his Review look £24 million better than it would otherwise have looked. It would have been £27 million lower than recoupment instead of £3 million.
When hon. Members opposite criticise the Reviews of my right hon. Friend and myself they should look at their right hon. Friend's Review. Our Reviews compare very favourably. This Review was a substantial cost-minus Review and my complaint is not that the Minister did this but that there seems to have been an attempt to conceal it. He should have written this into the White Paper in such a way as to make it plain to everyone concerned.
On the agricultural side, again the Minister has taken a number of steps with which we disagree profoundly. My hon. Friends have referred to them and I will not go into details. They were mean and niggardly. Some services did not cost a great deal in terms of money but they were important to the people concerned—the Northern Pennines Rural


Development Board, the advisory services and rabbit clearance societies. On the future rôle of the A.D.A.S., farmers want to know to what extent the A.D.A.S. will cease to provide certain services or cease to give help to some classes of farmers.
I understand that the Minister's proposal is to withdraw advice where alternative advice can be obtained from commercial firms or private sources. This is unsatisfactory and many farmers have doubts as to whether advice which they receive in that way will be entirely impartial. It will hit the smaller farmer in particular. Given the right advice, small farms may be potentially viable, but not if they are denied that advice. It is this kind of thing—I say this especially to the hon. Member for Weston-super-Mare—which could drive farmers to bankruptcy. All farmers should have equal access to a State-supported advisory service.
This is a sorry catalogue of cuts and measures which will bear most heavily on the smaller farmer.
But the right hon. Gentleman is also Minister of Food. Many of my hon. Friends have spoken effectively about the present food situation. It is the Minister's duty to protect the consumer from exorbitant price rises. He cannot claim that he has succeeded. Even the most dedicated Conservative supporter would find it hard to claim that the Minister has done anything to hold prices.
The Minister's stewardship has lasted for twelve months. Prices have rocketed into the stratosphere. There has been a rise of 10½ per cent. in food prices. In June. 1970, the index stood at 141·6. In mid-May last it was 156·3. As my hon. Friend the Member for Edinburgh, East (Mr. Strang) said, an additional £900 million has been imposed on the housewife.
It is true that there are external factors to be taken into account. This is one of the most difficult tasks that a Minister of Agriculture, Fisheries and Food has to deal with. Our complaint is that the Minister has done nothing positive or constructive to deal with it. This is before his levies begin to bite. The Minister himself has said that the cut in S.E.T. is negligible. We have seen announcements

by certain firms in newspapers indicating the commodities which they will reduce in price by a small margin. These cuts do not affect the fundamental items.
The Minister's record is one of dropping all the safeguards. He abolished the Consumer Council, the National Board for Prices and Incomes, and the early warning system. It is almost incredible. It is as if the Minister does not want to know what is going on.
The Minister talked about some of the factors which make for increased food prices. He did not mention the profit margins of the big companies. That is one of the factors which the National Board for Prices and Incomes would have looked at. The Minister has abandoned all the defences.
We recall the Minister's philosophy. We realise that he believes in what he is doing. He mentioned the newspapers. I will quote them to him. Beef: April, 1970, 8s. 6d. a lb.; June, 1971, 9s. 6d. a lb. Tea: April, 1970, 1s. 6d. a quarter; now, 1s. 8d. a quarter. Margarine: April, 1970, 2s. 4d. a lb.; now, 2s. 8d. a lb. Plain biscuits: April, 1970, 2s. a lb.; now, 2s. 5d. a lb. Lard: April, 1970, 2s. a lb.; now, 3s. 2d. a lb. Butter: April, 1970, 1s. 1 ld. a lb.; now, 2s. 6d. I am quoting the prices of items of food which the average housewife buys week by week.
It would be some comfort to us if we thought that there was a hope that the rise showed a sign of abating. It is the plight of the lower-paid and of the pensioner which worries us. The increase in the pension has already been eroded before the pensioners have received it.
The Minister mentioned the increase in the price of butter. Has this increase, which is considerable, affected demand? We had quotas on butter. The Minister has abolished the quotas for a temporary period. It would be interesting to know where the butter supplies are coming from now, whether he is satisfied that they axe coming in the right quantities and how this will affect prices from now on. If the price of butter goes up much more, half the population of this country will not be buying it. This is what those hon. Members representing milk-producing areas must remember.
I want to end with a brief word about two other matters which are the Minister's responsibility—forestry and fishing.


The Minister has cut the assistance which the fisheries industry was receiving. My hon. Friend the Member for Kingston upon Hull, West (Mr. James Johnson) and the hon. Member for Norfolk, North (Mr. Ralph Howell) referred to this in robust speeches, I hope that the Minister will deal with the matter when he replies.
There was a great deal of confusion in the replies of the Foreign and Commonwealth Secretary and the Under-Secretary of State to questions about the six-mile limit yesterday. The worry of the inshore fishermen is that if the outer six-mile limit goes after five years there will be a free-for-all which could be extremely damaging to the British fishermen. I hope that we shall get some clarification on this point.
On forestry, I understand that an inquiry is going on, and we shall await its result. Could the Minister say when he will be able to report to the House on this? The Opposition do not wish to see the powers of the Forestry Commission whittled away, to the advantage of private woodland owners, and we hope to have confirmation that that will not be the case.
For all these reasons, we must indict the Minister tonight. As Minister of Agriculture, he is taking the industry without good cause into a precarious and uncertain future, away from a policy which has produced efficiency and security, away from a policy which is the envy of most countries. As Minister of Fisheries he does not seem to have a grip on the realities of the E.E.C. negotiations. As Minister of Food he has been disastrous and this is because in his heart he does not believe in any kind of intervention on food prices. He has presided over the biggest increase in 12 months in modern history.
Contrary to what he believes, the housewives of Britain took what was said in 1970 very seriously indeed. That is why they returned my hon. Friend the Member for Bromsgove, and that is why they will return a Labour Government as soon as the party opposite has the guts to go to the country.

9.33 p.m.

The Under-Secretary of State for Home Affairs and Agriculture, Scottish Office (Mr. Alick Buchanan-Smith): This has

been a particularly interesting debate, in that the Opposition built it up as a great censure debate on the Government on food prices. Until the peroration of the last two minutes by the right hon. Member for Anglesey (Mr. Cledwyn Hughes), very few Labour Members have been present. At the opening of the debate there were only 25 Members on the Opposition benches and during most of the debate only six Opposition Members have been present. This is, after all, a debate on the Opposition's Supply Day. But what I find particularly strange about the debate is the lack of any new or constructive ideas from the Opposition.
I should like first to pay my personal tribute to the hon. Member for Broms-grove (Mr. Terry Davis), who made his maiden speech this afternoon. All of us who listened to that speech enjoyed it, particularly for the very kind and well-justified tribute which he paid to his predecessor, the late Mr. James Dance. Those of us who knew Mr. Dance as a colleague remember him as a friend. We remember him not only for his warmth of personality but for the tremendously forthright and active way in which he represented the interests of his constituency. I am sure that, as the hon. Gentleman said, if he can follow in those footsteps, he will be following a very good example.
What interested me most in the hon. Gentleman's speech was the reference to the importance of the integration of agriculture and of all industry in the different communities throughout the country. So often in these debates we think of agriculture as one compact compartment of the economy and manufacturing industry as another, whereas, of course, each contributes to the health of the economy as a whole. The hon. Gentleman was right to make that point. I will not at this stage mention some of the more contentious points in his speech. He did not keep entirely to the tradition of the maiden speech but it was none the worse for that. I shall be delighted to return to some of these points later.
What is significant about the debate is the extraordinarily diffident approach by hon. Members opposite—and the right hon. Member for Workington (Mr. Peart) and the right hon. Member for Anglesey were party to it. They all showed extraordinary resistance to any question of change in agriculture


and agricultural policy. What I found particularly dry and unproductive was their almost blind acceptance that the present system in some sacred way is right and must be perpetuated. They showed a complete unwillingness to consider almost any change. My hon. Friend the Member for Weston-super-Mare (Mr. Wiggin) was right when he drew attention to the hesitancy of the right hon. Member for Workington in dealing with the greater and more constructive issues.
I shall be happy to deal with the question of the change of policy to which the Opposition seem to show resistance, but before doing so I want to deal with some of the individual points raised. The hon. Member for Manchester, Wythenshawe (Mr. Alfred Morris) raised the question of food prices and the value-added tax. This is an important point and I asked his leave to confirm the position. I have been pleased to be able to do so. I confirm what my right hon. Friend the Chancellor of the Exchequer has said—that foods will be relieved of value-added tax except perhaps those which are at present subject to purchase tax. A Green Paper has been published on this matter. It is a consultative document and consultations are taking place on it with the main agricultural and food interests involved.
Another point raised concerned the Rural Development Board which is very close to the hearts of the right hon. Member for Workington and the hon. Member for Enfield, East (Mr. Mackie). I do not think that this is the place to go into this matter in detail, because there are other more important matters to discuss. The House had a full debate about this last month when all the issues were discussed. What was clear when we took our decision about the Board was that the benefits which it could bring to the area were outweighed by the costs of maintaining it. We are determined to maintain our policy of getting value for money in our public expenditure programme. That is what we promised the electorate.

Mr. Peart: When the concept of the Rural Development Board was introduced into the House no hon. Member criticised it.

Mr. Peter Mills: I did.

Mr. Buchanan-Smith: If the right hon. Gentleman cares to look at the record

he will find that my hon. and right hon. Friends voiced strong criticisms of this scheme.

Mr. Peart: rose—

Mr. Buchanan-Smith: I cannot give way any further. The right hon. Gentleman spoke of the agricultural development and advisory service. I remind him that the basis of our reorganisation here was the result of the proposals prepared by his right hon. Friend the Member for Anglesey. The only difference in what we brought forward was the addition of our new objectives for the advice service. The reorganisation of the service is based very much upon what the right hon. Member brought in. Therefore, some of the criticisms that have been made were not entirely fair.
My hon. Friends the Members for Aberdeenshire, East (Mr. Wolrige-Gordon) and Weston-super-Mare and the hon. Member for Enfield, East raised the question of sire licensing, a subject that has caused a certain amount of debate outside the House over many months. There is an argument on both sides here. As for boar licensing, there have been tremendous improvements in testing, performance, facilities and so on. My hon. Friend the Member for Aberdeenshire, East is quite right to draw attention to the success of the previous system, but we have to remember that livestock improvement is a dynamic process. The basis of our proposals on bull licensing is of a consultative nature and will be discussed fully with the agricultural and scientific interests involved.
My hon. Friends the Members for Gainsborough (Mr. Kimball) and Devizes (Mr. Charles Morrison) raised the subject of fowl pest. We are glad to see this on the decline. It has caused a lot of worry recently. We are pleased to have independent persons assisting us in the inquiry into the outbreak.
I turn to the question of fisheries, raised by the hon. Member for Kingston upon Hull, West (Mr. James Johnson). He is usually fair but he was being less than fair today in criticising my right hon. Friend for not mentioning fisheries in his opening speech. I must point out that his right hon. Friend the Member for Workington did not mention the subject.

Mr. James Johnson: rose—

Mr. Buchanan-Smith: I cannot give way. I purposely curtailed my remarks to allow all those who wanted to take part in the debate to do so. We shall shortly be making our announcement about the arrangements for operating subsidies for next year. At this time of the year we have an opportunity to debate these matters. The hon. Member also asked about the future of the W.F.A. and here I would refer him to my right hon. Friend's statement of 17th December saying that any decisions on the future of that body would have to await the outcome of negotiations in the E.E.C.
He asked me about our action in relation to Iceland and the reported statement from that country. I can assure the House that our policy in preparing for the 1973 United Nations Law of the Sea Conference will continue to be one of opposition to the extension of fishery limits beyond 12 miles. We shall certainly seek to persuade the Conference that the conservation problems, which to a large extent prompt coastal states to claim wider limits, are much better solved by multilateral agreed action than by unilateral action, which appears to be what Iceland is trying to take.
I should like to refer to the important topic of the Common Market, which many hon. Members have rightly raised. The hon. Members for Cardigan (Mr. Elystan Morgan) and Carmarthen (Mr. Gwynoro Jones) both asked about the future of milk marketing boards. It has been established with the Community that adequate supplies of milk for domestic consumption can be assured throughout the year under the Community price system. At the same time, the milk marketing boards are expected to be able to continue their important functions in relation to the regulation of supplies.
The hon. Member for Edinburgh, East (Mr. Strang) and my hon. Friend the Member for Ross and Cromarty (Mr. Gray) raised the matter of hill farming in relation to the Common Market negotiations. I yield second to none in the tribute I pay to this important sector of our agricultural industry. The production grants enjoyed by hill farmers have been essential to the health of those who work in the industry, but we have said that we cannot expect that those grants will always continue in exactly the same

way. We have undertaken to discuss hill farming with the Community, and these discussions are now taking place at the current Ministerial meeting. I cannot anticipate the outcome of the discussions, but we know that the Six have the same problems as we have. They already have a wide variety of regional aids available, and I believe they understand our needs.
Fishing is a very sensitive question. I represent a constituency which has inshore fishing interests, and the hon. Member for Kingston upon Hull, West knows the deep interest I have in the industry. The right hon. Member for Anglesey asked my right hon. Friend to repeat the assurance on exclusive six-mile fishing limit. There is no question of third-party nations being able to fish inside the six-mile limit. I met the deep-sea fishing interests in Scotland a week ago. We understand that we must balance the question of the limits, the interests of our inshore fishing industry and any advantage which the deep-sea industry may get in the waters of other members of the E.E.C. I certainly take the point made by the hon. Member for Kingston upon Hull, West—[HON. MEMBERS: "Which waters? "]—the waters of other nations of the E.E.C., of course. We are talking about the E.E.C. Those countries also have limits in the waters in which they fish.
I turn to our change of policy. My hon. Friend the Member for Torrington (Mr. Peter Mills) was absolutely right when he referred to the right hon. Member for Workington being a bit rusty in agriculture. He is so rusty that his machine has run down. It was running down when he left the Ministry of Agriculture a few years ago. The right hon. Member was co-operating with the late Tom Williams at the time of the 1947 Act and all that followed from it, and I do not grudge him his nostalgia. Nor do I grudge the hon. Member for Cardigan his great conservatism. He seemed tonight to have forgotten his Welsh background and radicalism and to exhibit a true conservatism. Hon. Gentlemen opposite fail to realise the sad state in which they left the industry last June.
In the six years before 1964, production rose at an average rate of 5·2 per cent., but in the following six years, 5½ years of which were during the term of office of the Labour Government, the


rate of increase in production was only 1·6 per cent. When we see such figures, we realise the barren nature of Labour agricultural policy. Furthermore, when we look at farm incomes we see that in October, 1970, they were worth in real term only 90 per cent. of what they were worth in October, 1964. In these and so many other ways we realise the poor agricultural legacy left by the Labour Government. Over the same period the industry had to face massive cost increases.
Against that background we have had to reassess agricultural policy. The Labour Government were to blame because they allowed this stagnation of production to persist at home purely on account of their narrow-minded devotion to an agricultural support system which had had its day. The former Administration were anxious about this matter. They set up an economic development committee, they looked at the problem in other ways and they brought in a selective expansion programme. But the outcome of these policies totally belied the hopes they tried to express to the industry and to the country in terms of an expanding industry.
We see from paragraph 6 on page 6 of the Labour Government's 1970 White Paper that productivity had dropped and that net income had declined by £36 million. That is the sort of story we hate under a Labour Government. We also see from paragraph 3 of that White Paper, on page 11, that expansion in the dairy herds had levelled off, expansion of total cattle-breeding herds was slowing down, home production of mutton and lamb for 1969–70 was less than in 1968–69 and the sheep-breeding flock was continuing to decline. That was the record of the Labour Government. There was a similar sorry situation on cereals. It would be wearisome to set it all out in detail.
The previous Administration did at least express distress and sorrow that their objectives had not been achieved, but the situation went on from year to year. On cereals, they tended to blame the weather as the cause of the trouble. Although cereals may not do well because of weather, it is not the only commodity to be considered. What is the main raw material for the cattle industry?

It is grass. What is the main material for the sheep industry? Again, it is grass. All we had in these years was a decline.
The hon. Member for Enfield, East accused my hon. Friend the hon. Member for Torrington of being selective, but what about the hon. Gentleman's own selectivity? He completely forgot an industry that is so important to his own country of Scotland, the sheep industry. What happened to lamb production under the previous Government? In 1964 production stood at 210,000 tons; in 1970 production had fallen to 180,000 tons. The truth is—

Mr. Mackie: rose—

Mr. Buchanan-Smith: I will not give way. The truth is that agriculture requires much more confidence in the future than any annual fixing of guarantees on the basis of what has happened in the past. Only when the market can give agriculture its whole return will farmers expand production to the full extent of the market's needs. That is an elementary fact which, in their imperfect understanding of the realities of the market situation, right hon. and hon. Gentleman opposite have ignored.
The switch that we are making to import levies is long overdue, and we are very glad to be able to get it started. The Opposition, as they did when they were in Government, have clung to an outmoded system of support. In that they did a disservice to agriculture. What is more, they did a disservice to the economy as a whole, since a strong agriculture can contribute to the strength of the economy. I do not blame right hon. and hon. Gentlemen opposite for the world increase in food prices. They cannot help that. However, what they were blind to was that, in a situation of rising world prices, there is nothing that can be done automatically if agriculture at home stagnates. A strong agriculture producing a greater proportion of our own food supplies means that we are less dependent on food from abroad and that we are not quite so much the victims of price rises overseas.
In today's debate, right hon. and hon. Gentlemen have set themselves up as the champions of the consumer. What has been interesting is the way in which, after one or two references from the benches


opposite about something to do with "strokes", my right hon. Friend exposed it—[Interruption] Right hon. and hon. Gentlemen opposite should look at their record. The hon. Member for Carmarthen asked who was to blame. The hon. Gentleman should look at the way in which his right hon. and hon. Friends put up costs. He should look at the way in which wages rose. It was the Leader of the Opposition himself who said that "one man's wage increase is another man's price increase". That is precisely what we have faced in the last few months. Who are the Opposition to talk about price increases? They were responsible. Their own measures—cost inflation, allowing wage inflation to run completely uncontrolled in the three months before we came to office—have pushed up prices.
Right hon. and hon. Gentlemen opposite have tried today to champion the consumer. They have stood up in their grubby white sheets and, wearing their tarnished haloes, have tried to blame the

present Government. The trouble is that they have such whacking great beams in their eyes that they fail to see their own faults.

If this is a censure debate, it is one of the tamest in my experience. I fling back the charges of right hon. and hon. Gentlemen opposite in their teeth. This has been a debate sponsored by yesterday's men to cover up their 5½ years of barrenness. They have not put forward one constructive idea. They are sterile of ideas for the future and, on today's performance, they will still be yesterday's men tomorrow.

Mr. Robert Mellish: I beg to move, That Subhead A, Salaries &c., be reduced by £5.
I wish I could make it more.

Question put:—

The House divided: Ayes 269, Noes 302.

Division No. 386.]
AYES
[10.0 p.m.


Abse, Leo
Darling, Rt. Hn. George
Griffiths, Eddie (Brightside)


Albu, Austen
Davidson, Arthur
Griffiths, Will (Exchange)


Allaun, Frank (Salford, E.)
Davies, Denzil (Llanelly)
Grimond, Rt. Hn. J.


Allen, Scholefield
Davies, G. Elfed (Rhondda, E.)
Gunter, Rt. Hn. R. J.


Archer, Peter (Rowley Regis)
Davies, Ifor (Cower)
Hamilton, William (Fife, W.)


Ashton, Joe
Davies, S. 0. (Merthyr Tydvil)
Hamling, William


Atkinson, Norman
Davis, Clinton (Hackney, C.)
Hannan, William (G'gow, Maryhill)


Bagier, Gordon A. T.
Davis, Terry (Bromsgrove)
Hardy, Peter


Barnes, Michael
Deakins, Eric
Harper, Joseph


Barnett, Joel
de Freitas, Rt. Hn. Sir Geoffrey
Harrison, Walter (Wakefield)


Beaney, Alan
Delargy, H. J.
Hart, Rt. Hn. Judith


Benn, Rt. Hn. Anthony Wedgwood
Dell, Rt. Hn. Edmund
Hattersley, Roy


Bennett, James (Glasgow, Bridgeton)
Dempsey, James
Healey, Rt. Hn. Denis


Bidwell, Sydney
Doig, Peter
Heffer, Eric S.


Bishop, E. S.
Douglas, Dick (Stirlingshire, E.)
Hilton, W. S.


Blenkinsop, Arthur
Driberg, Tom
Horam, John


Boardman, H. (Leigh)
Duffy, A. E. P.
Houghton, Rt. Hn. Douglas


Booth, Albert
Dunn, James A.
Howell, Denis (Small Heath)


Boyden, James (Bishop Auckland)
Dunnett, Jack
Huckfield, Leslie


Bradley, Tom
Eadie, Alex
Hughes, Rt. Hn. Cledwyn (Anglesey)


Brown, Bob (N'c'tIe-upon-Tyne, W.)
Edelman, Maurice
Hughes, Mark (Durham)


Brown, Hugh D. (G'gow, Provan)
Edwards, Robert (Bilston)
Hughes, Robert (Aberdeen, N.)


Brown, Ronald (Shoreditch &amp; F'bury)
Ellis, Tom
Hughes, Roy (Newport)


Buchan, Norman
English, Michael
Hunter, Adam


Buchanan, Richard (G'gow, Sp'burn)
Evans, Fred
Irvine, Rt. Hn. SirArthur (Edge Hill)


Butler, Mrs. Joyce (Wood Green)
Faulds, Andrew
Janner, Greville


Callaghan, Rt. Hn. James
Fisher, Mrs. Doris (B'ham, Ladywood)
Jay, Rt. Hn. Douglas


Campbell, I. (Dunbartonshire, W.)
Fitch, Alan (Wigan)
Jeger, Mrs. Lena (H'b'n&amp;St. P'cras, S.)


Cant, R. B.
Fletcher, Ted (Darlington)
Jenkins, Hugh (Putney)


Carmichael, Neil
Foley, Maurice
Jenkins, Rt. Hn. Roy (Stechford)


Carter, Ray (Birmingh'm, Northfield)
Foot, Michael
Johnson, James (K'ston-on-Hull, W.)


Carter-Jones, Lewis (Eccles)
Ford, Ben
Johnson, Walter (Derby, S.)


Castle, Rt. Hn. Barbara
Forrester, John
Jones, Barry (Flint, E.)


Clark, David (Coins Valley)
Fraser, John (Norwood)
Jones, Dan (Burnley)


Cocks, Michael (Bristol, S.)
Freeson, Reginald
Jones, Rt. Hn. Sir Elwyn (W. Ham, S.)


Cohen, Stanley
Galpern, Sir Myer
Jones, Gwynoro (Carmarthen)


Concannon, J. D.
Garrett, W. E.
Jones, T. Alec (Rhondda, W.)


Conlan, Bernard
Gilbert, Dr. John
Judd, Frank


Corbet, Mrs. Freda
Ginsburg, David
Kaufman, Gerald


Cox, Thomas (Wandsworth, C.)
Gelding, John
Kerr, Russell


Crawshaw, Richard
Gordon Walter, Rt. Hn. P. C
Kinnock, Neil


Cronin, John
Gourlay, Harry
Lambie, David


Crosland, Rt. Hn. Anthony
Grant, George (Morpeth)
Lamond, James


Cunningham, G. (Islington, S. W.)
Grant, John D. (Islington, E.)
Latham, Arthur


Dalyell Tarn






Lawson, George
Ogden, Eric
Spearing, Nigel


Leadbitter, Ted
O'Halloran, Michael
Spriggs, Leslie


Lee, Rt. Hn. Frederick
O'Malley, Brian
Stallard, A. W.


Leonard, Dick
Oram, Bert
Steel, David


Lestor, Miss Joan
Orbach, Maurice
Stewart, Donald (Western Isles)


Lever, Rt. Hn. Harold
Orme, Stanley
Stewart, Rt. Hn. Michael (Fulham)


Lewis, Arthur (W. Ham, N.)
Oswald, Thomas
Stoddart, David (Swindon)


Lewis, Ron (Carlisle)
Owen, Dr. David (Plymouth, Sutton)
Stonehouse, Rt. Hn. John


Lipton, Marcus
Paget, R. T.
Strang, Gavin


Lomas, Kenneth
Palmer, Arthur
Strauss, Rt. Hn. G. R.


Loughlin, Charles
Pannell, Rt. Hn. Charles
Summerskill, Hn. Dr. Shirley


Lyon, Alexander w. (York)
Parker, John (Dagenham)
Swain, Thomas


Mabon, Dr. J. Dickson
Parry, Robert (Liverpool, Exchange)
Taverne, Dick


McBride, Neil
Pavitt, Laurie
Thomas, Rt. Hn. George (Cardiff, W.)


McCann, John
Peart, Rt. Hn. Fred
Thomas, Jeffrey (Abertillery)


McCartney, Hugh
Pendry, Tom
Thomson, Rt. Hn. G. (Dundee, E.)


McElhone, Frank
Pentland, Norman
Thorpe, Rt. Hn. Jeremy


McGuire, Michael
Perry, Ernest G.
Tinn, James


Mackenzie, Gregor
Prescott, John
Tomney, Frank


Mackie, John
Price, J. T. (Westhoughton)
Torney, Tom


Mackintosh, John P.
Price, William (Rugby)
Tuck, Raphael


Maclennan, Robert
Probert, Arthur
Urwin, T. W.


McMillan, Tom (Glasgow, C.)
Rankin, John
Varley, Eric G.


McNamara, J. Kevin
Reed, D. (Sedgefield)
Wainwright, Edwin


Mahon, Simon (Bootle)
Rees, Merlyn (Leeds, S.)
Walden, Brian (B'm'ham, All Saints)


Mallalieu, E. L. (Brigg)
Rhodes, Geoffrey
Walker, Harold (Doncaster)


Mallalieu, J. P. W. (Huddersfield, E.)
Richard, Ivor
Wallace, George


Marks, Kenneth
Roberts, Albert (Normanton)
Watkins, David


Marquand, David
Roberts, Rt. Hn. Goronwy (Caernarvon)
Weitzman, David


Marsden, F.
Robertson, John (Paisley)
Wellbeloved, James


Marshall, Dr. Edmund
Roderick, Caerwyn E.(Br'c'n&amp;R'dnor)
Wells, William (Walsall, N.)


Mason, Rt. Hn. Roy
Rodgers, William (Stockton-on-Tees)
White, James (Glasgow, Pollok)


Mayhew, Christopher
Roper, John
Whitehead, Phillip


Meacher, Michael
Rose, Paul B.
Whitlock, William


Mellish, Rt. Hn. Robert
Ross, Rt. Hn. William (Kilmarnock)
Willey, Rt. Hn. Frederick


Mendelson, John
Sandelson, Neville
Williams, Alan (Swansea, W.)


Mikardo, Ian
Sheldon, Robert (Ashton-under-Lyne)
Williams, Mrs. Shirley (Hitchin)


Millan, Bruce
Shore, Rt. Hn. Peter (Stepney)
Williams, W. T. (Warrington)


Miller, Dr. M. S.
Short, Rt. Hn. Edward (N'c'tle-u-Tyne)
Wilson, Alexander (Hamilton)


Milne, Edward (Blyth)
Short, Mrs. Renée (W'hampton, N. E.)
Wilson, Rt. Hn. Harold (Huyton)


Mitchell, R. C. (S'hampton, Itchen)
Silkin, Rt. Hn. John (Deptford)
Wilson, William (Coventry, S.)


Molloy, William
Silkin, Hn. S. C. (Dulwich)
Woof, Robert


Morgan, Elystan (Cardiganshire)
Sillars, James



Morris, Alfred (Wythenshawe)
Silverman, Julius
TELLERS FOR THE AYES


Moyle, Roland
Skinner, Dennis
Mr. Ernest Armstrong and


Mulley, Rt. Hn. Frederick
Small, William
Mr. James Hamilton.


Murray, Ronald King
Smith, John (Lanarkshire, N.)





NOES


Adley, Robert
Bruce-Gardyne, J.
Dean, Paul


Alison, Michael (Barkston Ash)
Bryan, Paul
Deedes, Rt. Hn. W. F.


Allason, James (Hemel Hempstead)
Buchanan-Smith, Alick (Angus, N&amp;M)
Digby, Simon Wingfield


Amery, Rt. Hn. Julian
Buck, Antony
Dixon, Piers


Archer, Jeffrey (Louth)
Bullus, Sir Eric
Dodds-Parker, Douglas


Astor, John
Burden, F. A.
Douglas-Home, Rt. Hn. Sir Alec


Atkins, Humphrey
Butler, Adam (Bosworth)
Drayson, G. B.


Awdry, Daniel
Campbell Rt. Hn. G.(Moray&amp;Nairn)
du Cann, Rt. Hn. Edward


Baker Kenneth (St. Marylebone)
Carlisle, Mark
Dykes, Hugh


Baker, W. H. K. (Banff)
Carr, Rt. Hn. Robert
Eden, Sir John


Barber, Rt. Hn. Anthony
Cary, Sir Robert
Edwards, Nicholas (Pembroke)


Batsford, Brian
Channon, Paul
Elliot, Capt. Walter (Carshalton)


Beamish, Col. Sir Tufton
Chapman, Sydney
Elliott, R. W. (N'c'tle-upon-Tyne, N.)


Bell, Ronald
Chataway, Rt. Hn. Christopher
Emery, Peter


Bennett, Sir Frederic (Torquay)
Chichester-Clark, R.
Farr, John


Bennett, Dr. Reginald (Gosport)
Churchill, W. S.
Fell, Anthony


Benyon, W.
Clark, William (Surrey, E.)
Fenner, Mrs. Peggy


Berry, Hn. Anthony
Clarke Kenneth (Rushcliffe)
Fidler, Michael


Biffen, John
Cockeram, Eric
Finsberg, Geoffrey (Hampstead)


Biggs-Davison, John
Cooke, Robert
Fisher, Nigel (Surbiton)


Blaker, Peter
Coombs, Derek
Fookes, Miss Janet


Boardman, Tom (Leicester, S. W.)
Cooper, A. E.
Fortescue, Tim


Body, Richard
Cordle, John
Foster, Sir John


Boscawen Robert
Corfield, Rt. Hn. Frederick
Fowler, Norman


Bossom, Sir Clive
Cormack, Patrick
Fox, Marcus


Bowden, Andrew
Costain, A. P.
Fry, Peter


Boyd-Carpenter, Rt. Hn. John
Critchley, Julian
Galbraith, Hn. T. G.


Braine, Bernard
Crouch, David
Gardner, Edward


Bray, Ronald
Crowder, F. P.
Gibson-Watt, David


Brewis, John
Curran, Charles
Gilmour, Ian (Norfolk, C.)


Brinton, Sir Tatton
Davies, Rt. Hn. John (Knutsford)
Glyn, Dr. Alan


Brocklebank-Fowler, Christopher
d'Avigdor-Goldsmid, Sir Henry
Godber, Rt. Hn. J. B.


Brown, Sir Edward (Bath)
d'Avigdor-Goldsmid, Maj.-Gen. James








Goodhart, Philip
McCrindle, R. A.
Roberts, Wyn (Conway)


Goodhew, Victor
McLaren, Martin
Rodgers, Sir John (Sevenoaks)


Gorst, John
Maclean, Sir Fitzroy
Rossi, Hugh (Hornsey)


Gower, Raymond
McMaster, Stanley
Rost, Peter


Grant, Anthony (Harrow, C.)
Macmillan, Maurice (Farnham)
Royle, Anthony


Gray, Hamish
McNair-Wilson, Michael
Russell, Sir Ronald


Green, Alan
McNair-Wilson, Patrick (NewForest)
St. John-Stevas, Norman


Grieve, Percy
Maddan, Martin
Scott, Nicholas


Griffiths, Eldon (Bury St. Edmunds)
Madel, David
Sharples, Richard


Grylls, Michael
Maginnis, John E.
Shaw, Michael (Sc'b'gh &amp; Whitby)


Gummer, Selwyn
Marples, Rt. Hn. Ernest
Shelton, William (Clapham)


Gurden, Harold
Marten, Neil
Simeons, Charles


Hall, Miss Joan (Keighley)
Mather, Carol
Sinclair, Sir George


Hall, John (Wycombe)
Maude, Angus
Skeet, T. H. H.


Hall-Davis, A. G. F.
Maudling, Rt. Hn. Reginald
Soref, Harold


Hamilton, Michael (Salisbury)
Mawby, Ray
Speed, Keith


Hannam, John (Exeter)
Maxwell-Hyslop, R. J.
Spence, John


Harrison, Col. Sir Harwood (Eye)
Meyer, Sir Anthony
Sproat, lain


Haselhurst, Alan
Mills, Peter (Torrington)
Stainton, Keith


Hastings, Stephen
Mills, Stratton (Belfast, N.)
Stanbrook, Ivor


Havers, Michael
Mitchell, Lt.-Col. C. (Aberdeenshire, W)
Stewart-Smith, D. G. (Belper)


Hawkins, Paul
Mitchell, David (Basingstoke)
Stoddart-Scott, Col. Sir M.


Hayhoe, Barney
Moate, Roger
Stokes, John


Heseltine, Michael
Molyneux, James
Stuttaford, Dr. Tom


Hicks, Robert
Money, Ernle
Sutcliffe, John


Higgins, Terence L.
Monks, Mrs. Connie
Tapsell, Peter


Hiley, Joseph
Monro, Hector
Taylor, Sir Charles (Eastbourne)


Hill, John E. B. (Norfolk, S.)
Montgomery, Fergus
Taylor, Edward M.(G'gow, Cathcart)


Hill, James (Southampton, Test)
Morgan, Geraint (Denbigh)
Taylor, Frank (Moss Side)


Holland, Philip
Morgan-Giles, Rear-Adm.
Taylor, Robert (Croydon, N. W.)


Holt, Miss Mary
Morrison, Charles (Devizes)
Tebbit, Norman


Hordern, Peter
Mudd, David
Temple, John M.


Hornby, Richard
Murton, Oscar
Thatcher, Rt. Hn. Mrs. Margaret


Hornsby-Smith. Rt. Hn. Dame Patricia
Nabarro, Sir Gerald
Thomas, John Stradling (Monmouth)


Howe, Hn. Sir Geoffrey (Reigate)
Neave, Alrey
Thomas, Rt. Hn. Peter (Hendon, S.)


Howell, David (Guildford)
Nicholls, Sir Harmar
Thompson, Sir Richard (Croydon, S.)


Howell, Ralph (Norfolk, N.)
Noble, Rt. Hn. Michael
Tilney, John


Hunt, John
Normanton, Tom
Trafford, Dr. Anthony


Hutchison, Michael Clark
Nott, John
Trew, Peter


Iremonger, T. L.
Onslow, Cranley
Tugendhat, Christopher


Irvine, Bryant Godman (Rye)
Oppenheim, Mrs. Sally
Turton, Rt. Hn. Sir Robin


James, David
Orr, Capt. L. P. S.
van Straubenzee, W. R.


Jenkin, Patrick (Woodford)
Osborn, John
Vaughan, Dr. Gerard


Jennings, J. C. (Burton)
Owen, Idris (Stockport, N.)
Vickers, Dame Joan


Johnson Smith, G. (E. Grinstead)
Page, Graham (Crosby)
Waddington, David


Jones, Arthur (Northants, S.)
Page, John (Harrow, W.)
Walder, David (Clitheroe)


Jopliing, Michael
Parkinson, Cecil (Enfield, W.)
Walter, Rt. Hn. Peter (Worcester)


Joseph, Rt. Hn. Sir Keith
Peel, John
Walker-Smith, Rt. Hn. Sir Derek


Kaberry, Sir Donald
Percival, Ian
Wall, Patrick


Kellett, Mrs. Elaine
Peyton, Rt. Hn. John
Walters, Dennis


Kilfedder, James
Pike, Miss Mervyn
Ward, Dame Irene


Kimball, Marcus
Pink, R. Bonner
Warren, Kenneth


King, Evelyn (Dorset, S.)
Pounder, Rafton
Weatherill, Bernard


King, Tom (Bridgwater)
Powell, Rt. Hn. J. Enoch
Wells, John (Maidstone)


Kinsey, J. R.
Price, David (Eastleigh)
White, Roger (Gravesend)


Kitson, Timothy
Prior, Rt. Hn. J. M. L.
Whitelaw, Rt. Hn. William


Knight, Mrs. Jill
Proudfoot, Wilfred
Wiggin, Jerry


Knox, David
Pym, Rt. Hn. Francis
Wilkinson, John


Lambton, Anthony
Quennell, Miss J. M.
Wolrige-Gordon, Patrick


Lane, David
Raison, Timothy
Wood, Rt. Hn. Richard


Legge-Bourke, Sir Harry
Redmond, Robert
Woodhouse, Hn. Christopher


Le Marchant, Spencer
Reed, Laurence (Bolton, E.)
Woodnutt, Mark


Lewis, Kenneth (Rutland)
Rees, Peter (Dover)
Worsley, Marcus


Llovd, Rt. Hn. Geoffrey (Sut'nC'dfield)
Rees-Davies, W. R.
Wylie, Rt. Hn. N. R.


Lloyd, Ian (P'tsm'th, Langstone)
Renton, Rt. Hn. Sir David
Younger, Hn. George


Longden, Gilbert
Rhys Williams, Sir Brandon



Loveridge, John
Ridley, Hn. Nicholas
TELLERS FOR THE NOES:


Luce, R. N.
Ridsdale, Julian
Mr. Reginald Eyre and


McAdden, Sir Stephen
Roberts, Michael (Cardiff, N.)
Mr. Jasper More.


MacArthur, Ian

Original Question again proposed.

It being after Ten o'clock, the debate stood adjourned.

BUSINESS OF THE HOUSE

Ordered,
That the Investment and Building Grants Bill may be proceeded with at this day's Sitting, though opposed, until any hour.—[Mr. Goodhew.]

INVESTMENT AND BUILDING GRANTS BILL

Not amended (in the Standing Commitmittee), considered.

Clause 1

ABOLITION OF INVESTMENT GRANTS

10.14 p.m.

The Under-Secretary of State for Trade and Industry (Mr. Anthony Grant): I beg to move Amendment No. 1, in page 1, line 18, after 'that', insert:
' there shall be disregarded for the purposes of paragraph (6) above—

(a) any transfer of the benefit of a contract to a member of a group by any other member of that group, and
(b):

Perhaps it would be convenient to the House if we discussed at the same time Amendments Nos. 2, 5, 6 and 8, which are consequential.
This group of Amendments is of a technical nature. It is designed to remove a difficulty which certain companies have pointed out to us since the Bill was published. It has been pointed out that under the present terms of the Bill, a group, one of whose companies entered into a contract before 27th October, 1970, may not receive grant on sums payable under a contract laid before 27th October, if the company is subsequently involved in a group reorganisation.
At present subsection (2) provides that grant may be made on expenditure incurred on or after 27th October, 1970, provided the Secretary of State is satisfied that it consists of a sum falling due under a contract made before that date and also that the applicant did not incur the expenditure by reason of anything done or any transaction entered into by the applicant on or after that date. The

effect of the latter provision is to preclude the payment of grant if the benefit of a contract is transferred between companies after 26th October, 1970.
Group reorganisations raise special problems. In such cases, assets may have been contracted for before 27th October, 1970, but not delivered at the time the merger or reorganisation took place. On delivery, items will still be used for the purposes for which they were ordered; they will still be installed in the same factory as was originally intended. The only difference is that the contract was placed by one company in the group and, as a result of the re-organisation, the asset is delivered to a company with a different legal identity, but within the same group.

The Amendments enable the benefit of a contract made before 27th October, 1970, to be transferred to a member of a group of companies by any other member of that group without loss of eligibility for grant and permits grant to be paid to the transferee company in respect of expenditure incurred as a result of the transfer.

The Amendments will also cover the case, which I understand represents a fairly common practice in some groups, where contracts are placed on behalf of the group by a holding company, prior to a final decision to which operations subsidiary the assets should be delivered. The Amendments do not permit contracts to be transferred to "successor" companies which are not members of the same group as defined in the Companies Act, 1948, to qualify for grant. I would regard such a concession as constituting a breach in the principle underlying the Bill rather than removing a technical difficulty, as do the Government Amendments. These will, however, be of assistance in quite a large number of cases.

Amendment agreed to.

Amendment made: No. 2, in page 1, line 20, leave out:
' shall be disregarded for the purposes of paragraph (b) above'.—[Mr. Anthony Grant.]

Mr. Piers Dixon: I beg to move Amendment No. 3, in page 1, line 20, at end insert:
(2A) (a) Subsection (1) of this section shall not prevent the making of a grant under the


said Part I in respect of any qualifying expenditure incurred before 27th October 1972 by any person in relation to the provision of any machinery or plant or any asset, where—

(i) the machinery or plant or the asset is provided by being manufactured, assembled or constructed by that person; and
(ii) the expenditure had begun before 27th October 1970.
(b) In this subsection—
(i) the expressions 'asset' and 'machinery or plant' have the same respective meanings as in the said Part I; and
(ii) the expression ' qualifying expenditure' means expenditure which if this Act had not been enacted would have qualified for approval for a grant under the said Part I,

I welcome the terms of the Bill in genera] but, as the Government have recognised, by changing from a system of investment grants to the new form of investment incentives, a number of unfairnesses arise. They have, therefore, introduced various measures to tide over companies which contracted in legal terms to spend money on building up their investments. But incongruously, in the process, they have left out of account many fine British companies which, for very good reasons usually, decide that the best thing to do is to do their own investment through their own labour force and, therefore, not to be specifically contracted in a legal sense. It is with this in mind that I submit the Amendment.
There are many companies which, for reasons of confidentiality and commercial security, feel bound, when investing in new plant, to embark on this exercise through the mechanics of their internal organisation. But even if it could be argued that there are cases in which those companies should not feel that they should use their internal labour force, they find that in purely practical terms it would be completely impossible to find outside contractors who in practice would be able to supply the highly technical plant they require. Therefore, the companies which are not embraced by the measures which the Treasury Bench have decided to introduce are frequently the very companies which we are trying to encourage—companies with high technology, companies which show that they are adventurous and are prepared to go to great lengths within their organisation to build up new investment along modern and technological lines.
Just such a company is English China Clays, the largest company in my constituency. I think that all hon. Members would agree that this company has been in the forefront of technology for many decades. It has been in the forefront of the export trade Its exports account for more than 75 per cent. of its total production. Year by year, English China Clays has won the Queen's Award for Industry. But now we have a situation in which, on the one hand, a company such as this one is being congratulated on receiving the Queen's Award for Industry and, on the other hand, suddenly, for no reason, is hit on the head to the extent, in this case, of £1,200,000—purely through a capricious element in the Bill.
Therefore, I strongly urge my right hon. and hon. Friends on the Front Bench to harken to companies of this sort which are in this anomalous position. Unless something is done for such companies the message will go out throughout the country that the adventurous companies, which can do things for themselves and which are resourceful, will be forgotten by the Government.

Mr. T. H. H. Skeet: I should like to say a few words in support of my hon. Friend the Member for Truro (Mr. Dixon). It is an anomalous situation when an extremely enterprising company, doing its own work and, therefore, not bringing in sub-contractors, finds that by the terminal date of 27th October, 1970, it will lose the cash grant entirely. I should have thought that some formula was possible to find a way round this problem. If it was conceivable that the company could give an order to itself and then present that fact to the Minister, it would get its cash grant. If it cannot do that, its only alternative is to spend a lot of money and go to an outside contractor; in which case, provided that it is inside the terminal date, it is safeguarded.
As has been correctly interpreted, not merely in connection with English China Clays but also in connection with machine tools and in connection with the chemical industry, it is found most advantageous for these firms to do some of their own research and build their own machinery. By so doing they fall victim to these provisions which were not drafted so as to cater for such a problem.
I ask the Minister to reconsider the matter and see whether a formula can be found to get round this problem. This is an anomaly which should be removed.

Sir Harmar Nicholls: I have been convinced by argument, not having done any homework. I rather suspect that the reason for some possible reluctance on the Treasury Bench to accept the Amendment is the difficulty in administration of identifying the cost. I can well understand that the cost of doing extra work merged within the normal operations of a company is not so easily identified as is work done under separate contract entered into at arm's length with a separate firm.
If it is the administrative difficulty which makes my hon. Friend the Minister reluctant to accept the Amendment, would an accountant's certificate that the money had been spent be acceptable? If the Government are not prepared to accept the certificate of the accountant who represents the firm for the normal audit, would the Government accept the certificate of an outside inquiring accountant provided that the firm met the necessary expense?
If it can be shown that the work in question would in normal circumstances have been put out to an outside contractor but, for reasons of greater efficiency or technical know-how, was performed within the firm itself, it should be dealt with on exactly the same basis as though it had been performed by an outside contractor.
As I have some knowledge of how Departments react to intricate difficulties, I suspect that it is the administrative difficulty which inhibits the Government from accepting the Amendment. If this is so, I ask the Minister to consider the Amendment with sympathy, on the understanding that the firm in question, either through its own accountant or through an outside inquiring accountant, can produce a certificate that the money has been properly spent for the purpose in question.

Mr. R. J. Maxwell-Hyslop: I think that my hon. Friend the Member for Peterborough (Sir Harmar Nicholls) is correct in surmising that it is a slightly reticence because of administrative problems rather than any objection

in principle that inhibits the Government from accepting the Amendment.
A chartered accountant's certificate is an appropriate way of getting over the difficulty. As Government Departments like precedents, I suggest a precedent which is relevant. Recently the Government decided to change the system of payment of cereal deficiency grant to avoid the ludicrous charade of a farmer growing grain, then selling it to a grain dealer to qualify for subsidy, and then having to buy it back from the dealer. We moved instead to a system of acreage payment. That system is analogous to a firm which produces within itself capital equipment that it needs. It is a more sensible and efficient way of dealing with it.
The smaller the enterprise the less likely it is to go through the unnecessary work of signing a contract with itself or even placing an order on itself. It is done by word of mouth or at most by internal memo, which is not a contract, instructing some part of its own works to produce items of capital equipment which it will need. It is bona fide, and it results generally in a more appropriate article being produced than the stock one, at less cost. This is tending towards an efficient industry. The anomalies created by the Bill are so great as to warrant the amendment of the Bill. We should not let the matter go by just because the total number of firms involved is probably quite small. A thing is unjust even if it affects only one person.
Therefore, I ask my hon. Friend the Minister not just to look at the Amendment sympathetically but to ensure that remedial action is taken. I am certain that if there is enough pressure from these benches it will be taken.

10.30 p.m.

Mr. Evelyn King: My hon. Friends have described the problem so cogently and put forward a remedy so sensible that there is not much left to say. But I think that one point has not been made sufficiently strongly. English China Clays also has operations proceeding in my constituency, and therefore I entirely share the views of my hon. Friend the Member for Truro (Mr. Dixon).
Above all, I would make the point that for English China Clays it is not a matter of choice. It and other firms


have skilled engineers and technicians, and for many years they have made their own equipment. They also make their own tools with which to make that equipment. They have no choice, in that I am advised that there is no other firm in Great Britain, or even overseas, which can produce the equipment it needs to carry on its business as efficiently as it does. Therefore, it cannot go elsewhere and have the advantage of grants if it desires.
I hope that my hon. Friend the Minister will be able to offer us the sympathy that these arguments deserve.

Mr. Anthony Grant: My hon. Friend the Member for Truro (Mr. Dixon) has explained very clearly the purpose of his Amendment. I much appreciate the remarks made, commendably briefly, by my other hon. Friends.
In particular, my hon. Friend the Member for Truro has referred to the position of English China Clays, which tends to make investments through its own labour resources, and thus not a great deal of its expenditure after 26th October, 1970, will be payable under contracts made with other firms, and the amount of investment grant it will be able to receive under the transitional arrangements will be limited.
I recognise the company's excellent record. It has a first-class export record, and I appreciate the case my hon. Friend has made for the firm. But this in itself cannot be a reason for treating it differently from other firms under the Bill. No doubt the method of investment the company has chosen may help it to preserve its competitive position in international trade.
When the Government decided to restrict the transitional arrangements to expenditure incurred under a contract with a third party, it was fully recognised that this would lead to firms which build their own assets receiving less in investment grants than firms which conducted their business in another way. But the arrangements will not prevent such firms altogether from receiving investment grant. Whether they can show that a part of machinery or plant has been purchased under a contract made before 27th October, 1970, and this part is at once appropriated to an asset used in a qualifying process, grant will be payable.
I have had the advantage—as has my hon. Friend the Minister for Industry, I believe—of a very helpful discussion with members of the English China Clays company along these lines to see whether there is any way in which they can be helped in this direction. Given our desire to end investment grants quickly, we think that the basic principle embodied in the Bill is sound. There is a clear distinction between expenditure to which a firm is legally bound and other expenditure.
In agreeing to pay grant on expenditure of the former type, we have gone as far as is reasonable in meeting industry's needs. We must remember that the arrangements are designed to cover transition from one form of investment to another which we think is a better form, and not the ending of investment incentives in toto. They were not designed to maintain the status quo in all respects during the transitional period.
My hon. Friend the Member for Peterborough (Sir Harmar Nicholls) queried whether this was just an administrative point. It is not just an administrative point which I am taking on this Amendment, but there is a slight administrative difficulty to which I should draw attention. The computation of expenditure, for investment grant purposes, on self-built assets is already a more complex matter than the more straightforward case where an asset is bought outright. The cost of self-built assets includes notional sums attributable to the provision of the asset, representing material taken from stock, labour costs, overheads, etc., as well as actual payments of money. But so far it has not always been necessary to decide in particular cases what constitutes a unit of plant or machinery or an asset in respect of which expenditure must have been begun by a given date before grant can be paid. For example, is it a pump or a tank which forms part of a large complex, or is it the whole complex itself? In this sense, contrary to the suggestion in the Amendment, there is no definition of "plant or machinery" or "an asset" in the 1966 Act.
If the Amendment were to be accepted, firms would argue in favour of the widest interpretation of the terms. If this were accepted, all firms which had incurred any expenditure at all by 27th October 1970 on a development which was to


continue for a number of years could claim that expenditure incurred thereafter was in respect of the same asset and they would have carte blanche to receive investment grant on expenditure incurred for a full two years afterwards on the continuing development. They would thus be placed in a more favourable position than most firms buying assets under contract with other parties. The cost to public funds would be very great.
If, to avoid this large increase in cost, the Department was to try to insist on a narrow interpretation of these terms, it would be forced to devise new administrative rules with all the distinctions and discriminations which these inevitably involve. Our objection to such discrimination, as my hon. Friends will recall, was one of the important reasons which led the Government to decide in the first place to replace investment grants with allowances and reductions.
It is important to get the matter in perspective. This Bill is concerned essentially with transitional periods. There are countervailing advantages of which sight is sometimes lost. Firms building their own assets will benefit, in the same way as will every other firm, from two reductions in corporation tax in future. Those in the development areas, including English China Clays, will be able to claim free depreciation on the relevant capital expenditure incurred after 26th October, 1970.

Mr. Evelyn King: When my hon. Friend refers to English China Clays as being in a development area, he will be aware that the company has branches in a number of areas. Will he deal with the situation of its outside branches?

Mr. Grant: Part of the company is in a development area, and I have referred to the advantages it would receive from free depreciation, but if firms are elsewhere they could benefit from the new 60 per cent. first-year capital allowance against tax.
In the case of an efficient company like English China Clays it seems that there are countervailing advantages which can be claimed and which may be open to them. I ask the House to consider the overall picture. The arguments I have advanced against the Amendment,

so eloquently moved by my hon. Friend, are based on principle, cost and administration. I regret to say that I must advise the House to reject the Amendment.

Mr. Eric G. Varley: We on this side of the House have no real desire to get hon. Gentlemen opposite out of their difficulties. We recall on Second Reading that they practically all voted with relish for this Bill, particularly Clause 1, which ends investment grants. We find it rather strange that now they should be wanting special treatment. We have heard the debates about transition in Committee and we are not happy about the transitional arrangements.
We were told in the White Paper on investment incentives published in October of last year that the Government's view was that the investment grants scheme involved a high public expenditure cost without achieving its objectives, that there was investment leading to a waste of resources, and so on. Now we hear hon. Gentlemen opposite pleading for exemptions and we have formed the conclusion that hon. Gentlemen are in favour of the Bill in general but against it in particular.
They are right to complain in some respects because the Conservative Party, in opposition and in its election manifesto, gave the impression to the country and those firms considering this matter that there would be proper transitional arrangements. Page 14 of the Conservative election manifesto said:
These changes will be subject to transitional arrangements and will not in any way be retrospective.
The Secretary of State for Social Services, when he was Opposition spokesman on trade and industry matters, in a Spectator article before the election, gave the impression to firms that they would in no way be worse off as a consequence of changing from cash grants to allowances. I am sure hon. Gentlemen will regard the answer they have received as totally unsatisfactory but since most of them supported this Measure on Second Reading I do not think that we can support the Amendment.

Mr. David Waddington: Surely all that the hon. Member for Chesterfield (Mr. Varley) has said in the last five minutes is that if a particularly stupid system is established


there are bound to be anomalies in abolishing the system?

Mr. Dixon: I could not conceal from the House the strength of feeling that exists in Cornwall and elsewhere about this matter. One remark by my hon. Friend which seemed to have a familiar ring came when he said that we were merely discussing transitional arrangements. In many cases it is the transitional arrangements which are as important as the substantive arrangements in the final analysis. We feel strongly about this. On the other hand, I am aware that Ministers have discussed this matter for many hours with English China Clays and other companies. They have given sympathetic consideration to this and, in view of this, I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.

10.45 p.m.

Mr. John Sutcliffe: I beg to move Amendment No. 4, in page 1, line 20, at end insert:
(3) Subsection (1) above shall not prevent the making of a grant under the said Part I where the Secretary of State is satisfied that a person has commenced the working of a mine within the meaning of section 182(3) of the Mines and Quarries Act 1954 before the said 27th October and that that person has incurred expenditure under a contract made on or within two years after that date in providing works, or as the case may be, new machinery or plant which is required for the further working of that mine or part thereof.
This is not the first occasion on which deep mining has been raised in the context of the Bill. My hon. Friend the Minister has questioned whether an Amendment such as this will achieve the specific object intended. He does not agree that deep mining is in any special situation or that it is affected to an extreme degree by his proposals. He does not accept the contention that an agreement to develop a mine in its totality constitutes a legally binding commitment within the terms of the Bill. Finally, he has affirmed throughout the progress of the Bill the unblemishable purity of the principle which it enshrines. I shall try to avoid going over well-trodden ground, but I shall deal in turn with the points of disagreement.

The Amendment is directed to one particular type of operation, namely, deep mining. There is, furthermore, only one deep mine in this country significantly

affected by the Bill, namely, Cleveland Potash, and the Amendment seeks to make proper and equitable transitional arrangements for that mine. If there is any doubt about the limited objective being sufficiently defined by the Amendment, it is quite simply resolved by inserting in line 3 after "Mines and Quarries Act 1954" the words:
which is to be served by a vertical shaft of a depth of not less than 1,000 feet

I think the Amendment clearly defines its objective. The Amendment refers to the working of a mine, and "working" is deemed to include the operation of driving a shaft or outlet for it.

The Minister has said that other land-based projects, large-scale, long duration, development projects, will be encouraged. I understand his fears, but I can see no grounds for them. He has failed so far to tell me how such projects will be encouraged, and to what effect they will be encouraged, by the acceptance of the Amendment, since the Amendment is in no way related to them. The examples he gave were the construction of an oil refinery or a petro-chemical plant, a kind of construction which is not an integrated unit in the way that a mine is.

If I may give an example, Cleveland Potash has to see its way through an expenditure of £40 million just to produce one product—potash. For a petrochemical project it is quite different. Investment can be cut off at any number of different stages and there is still a product to sell. After the cracking, reforming and extraction stages there is a wide variety of products—ethylene, propylene and benzine, to name just a few, and there are many different plants which use these products. They are only primary petro-chemicals. If the process is taken to further stages, at each stage a new investment is being made in new plant. Subsidiary products are grouped under intermediates, chemical end products and polymers, which are even more numerous. From the point of view of a cut-off date, the argument that such land-based investments can be compared with a one-product mine is simply untenable.

I have argued previously that special factors make deep mining unique in degree to an extent that it is different altogether from other large-scale projects.


I have emphasised the scale of the development and construction risk, the possibility of a not partial and not even substantial but total loss if, for any reason, the product fails. I have also emphasised the length of the construction period, the amount of capital required and inordinate length of time which must ensue before there can be any return on capital or an advantage from allowances.

My hon. Friend has resisted these arguments. He has resisted the contention that these factors apply to an extreme degree in deep mining and in deep mining alone and that the combined effect puts this sector of industry in a category all its own. But, significantly, he has made no attempt to refute these arguments beyond saying that he does not accept them. By implication, however, the arguments are already accepted. On Second Reading he said, referring to deep mining:
' We understand its difficulties, particularly the high risks involved in searching for and proving mineral deposits, and the long time which may elapse before expenditure on successful exploration can be recovered."—[OFFICIAL REPORT, 5th May, 1971; Vol. 816, c. 1496.]

My hon. Friend the Minister for Industry said in Committee:
It is in recognition of these facts that we have already had extensive talks with the industry, and we are considering what we can do to help.

In all logic, one would think that he meant now. But, no! He went on:
These discussions will continue … from the point of view of new projects in the long-term future …"[OFFICIAL REPORT, Standing Committee E, 25th May, 1971, c. 85.]

Is it really good enough to talk of the need for help in the long-term future while jeopardising a new project in the short-term by the abrupt removal of the only real measure of encouragement that new mining has had? I refer to the 1966 Act. The introduction of investment grants, which is immediate cash aid as opposed to deferred tax relief, undoubtedly brought about a resurgence in new mining activity. My hon. Friend the Under-Secretary of State has said that it was right to draw a distinction between those who, by acting on their own decisions, have committed themselves at law to incurring expenditure and those who have not. In the case of deep mining, I am sure it was right, but one can dispute that it was ever right to follow slavishly

the precedent set by the 1966 Act in so far as transitional arrangements given under the Act changed the incentive system from allowances to grants—and, of course, by a change in that direction everybody was bound to benefit. It is a very difficult thing to change the other way and still to follow the transitional pattern of the 1966 Act, and quite impossible to avoid the harsh element of retrospective legislation which has inevitably crept in.

Under the 1966 Act, how logical and sensible it was to set up a separate single project mining company and to budget, as did Cleveland Potash, for considerable cash grant incentives of £13½ million. But how foolish it looks in 1971, when the Minister denies any contractual commitment to develop in its totality a single project mine on the part of a single project company, as though such a denial makes sense.

In 1971, the £13½ million in Government finance becomes £6 million, the 1971 Finance Bill substitutes taxation allowances, the effective value of which is very much less than the value of development area investment grant plus taxation allowances on the remaining expenditure. But more serious still than this, a six-year construction and development period precludes short-term relief on expenditure, since there will be no profits and the consortium relief is of no avail either to I.C.I, and Charter Consolidated until potash is won and sold, until there are some profits. So whichever way they turn, they are hamstrung by what is tantamount to no proper transitional arrangements.

The Minister has used the argument that the corporation tax cut is some compensation, but it is no more compensation than allowances to a company which will not make any profit for six years. And let us be under no illusions: the greater flexibility which has been given under the Local Employment Acts will alleviate this great loss of liquidity to Cleveland Potash, but it will alleviate it by no more than £1 million, and that will be by way of loan, not grant. The Minister's power to compensate is strictly limited under these Acts.

On Second Reading, the Minister said:
I am sure it is right to stick to the principle I have already defined.


Just before that he said:
… although it is possible to make out a case, careful study of any case at once shows that the principle is opened wide and destroys the whole basis of the proposals …"— [OFFICIAL REPORT, 5th May, 1971; Vol. 816, c, 1389.]

But he has already conceded the principle. He assured my hon. Friend the Member for Tynemouth (Dame Irene Ward) that he would devise, with the Chamber of Shipping, a form of words which would meet the substance of her arguments, but without opening the door, he said, too widely. So the door is wide but not too wide.

The shipping concession has been made for two reasons, in the Minister's own words. First, the shipping industry has made a unique contribution to the economy, and, second, it trades in unusually difficult conditions. On the first point he mentioned a contribution to our invisible balance of payments account of £298 million. This is not the contribution of a single shipping company or project, nor is it the prospective contribution of those ships which will benefit from all the extras which the transitional arrangements have been or will be extended to cover on the basis of the hulls which have been legally contracted for before 27th October. The £298 million is the contribution of the shipping industry as a whole, but that is to be set against not that of the mining industry as a whole, but the contribution of a single mine to the balance of payments. The contribution of Cleveland Potash will be £14 million rising to £30 million, the biggest single contribution of any import-saving project in the United Kingdom.

11.0 p.m.

We may compare the loss of expected grant of £9 million for shipping spread over a number of committed hulls with a loss of £6 million concentrated on a single mining project. This is a Government withdrawal of a cash contribution from Cleveland Potash representing 15 per cent. of the total cost of the project. What ship owner suffers to that extent? What ship owner can complain of deferred benefit from allowance or tax relief by reason of a construction and development period of six years? In no other case is benefit so deferred.

Apart from his understandable preference for bouquets rather than bricks

from my hon. Friend the Member for Tynemouth, the other factor inducing my hon. Friend to breach his rigid principle is the peculiar international trading conditions in which the shipping industry has to operate, and he mentioned lack of any tariff protection in face of unrestricted international competition. Has he ever considered that potash mining may require some assistance in the long development stage in order to offset its total lack of tariff protection and its lack of other forms of assistance available to the shipping industry? When the potash mine is in production, it will have to fight hard to offset the advantage of well-established and government-supported overseas competitors in France, West Germany, supported by investment grants, and, in Eastern Europe, in East Germany and Russia, and in Canada where there is a subsidy by tax exemption and special freight rates. Is my hon. Friend aware that between 30 per cent. and 50 per cent. of potash production will have to be in competition with European and North American producers at a time of world over capacity?

Shipping has been favoured over other forms of transport; why cannot deep mining be favoured over other sectors of industry? One of the arguments in favour of special dispensation for shipping is that traditionally it has been helped, but it is this very lack of traditional help which has inhibited the exploitation of minerals in deep mining in this country. I understand that the Government accept that there is a special case in the long-term future for action to help new projects in deep mining, but that in the immediate future nothing will be done to alleviate the effect of retrospective legislation on a unique mining project of immense significance to the North-East and of untold potential advantage to the United Kingdom, not least the potential strategic advantage which we shall have with the production of two of the three major plant nutrients, nitrogen and potash, located in the United Kingdom.

Mr. Frederick Willey: I earnestly appeal to the Government to accept the Amendment. If they do not, then I speak by way of obituary. There is such feeling on Teesside about this matter that the hon. Member for Middlesbrough, West (Mr. Sutcliffe) knows that his seat will be forfeited


as an expression of lack of confidence in the North-East. I wish the hon. Gentleman no personal harm. However, the Government should recognise the consequences of not accepting the Amendment.
People in the North-East believe that they are subject to severe political prejudice. I heard today, in answer to a Question, that the value-added tax office is to go to Southend. [HON. MEMBERS: "Disgraceful."] This is a decision of political discrimination which goes in the face of any development area policy.

Mr. Alex Eadie: rose—

Mr. Willey: The North-East has already lost two Government Department headquarters. Now it is to lose the prospect of getting some compensation for that loss.
The hon. Member for Middlesbrough, West spoke about the ill effects, the disastrous consequences, of the abruptness of this decision. I will illustrate this point by way of example. Just before the election I was approached by the representative of a trans-Atlantic company, with a subsidiary in this country, which has invested in the North-East. He wanted an assurance from me that there would be no immediate change of policy if there should be a change of Government. I was unable to give that assurance. But I expressed myself in what I thought was a sensible way by saying that I did not believe that a Conservative Government could or would seek to change development policy drastically overnight. Unfortunately, I was wrong. The company which sought my advice, which had made an investment in the North-East, was better informed about Conservative headquarters policy, because it has made no further investment there.
I am sure that this has happened in scores of cases. Whenever there is any question of a big development, there has to be some guarantee over a reasonable time about future policy. Because that trans-Atlantic company could not have the assurance for which it asked, it decided not to develop in the North-East or, indeed, in this country. These are the consequences from which we are suffering because of this flippant, politically hostile attitude to the development areas.
The hon. Member for Middlesbrough, West has raised a matter not only of particular political significance to Fees-side, but of general interest to the North-East. This development has been discussed and proposed for a considerable time. At last it seems that hopes which seemed likely to be frustrated years ago will now be fulfilled; but we are getting this serious rebuff from the Government. This is clearly a clear breach of a moral undertaking. Anyone now considering development in the North-East, or in any other development area, knows that this is a sign of lack of confidence in and of political obligation to the development of these difficult regions. This is of significance not only to the North-East, but to the development areas as a whole.
The Government have a moral obligation to accept the Amendment. It clearly refers to one particular development only. Although this is of exceptional importance to Teesside, it is of general importance to the North-East development area as a whole. The matter has significance as a mark of the Government's integrity and the sincerity of their development area policy.

Mr. T. H. H. Skeet: I think that the Government will have to look again at this, because they are wrong, and the sooner they face the facts the better.
Looking back at the world's fertiliser market, I.C.I., if it came to consider the question again, would probably not go ahead with Cleveland Potash. There are immense risks involved, and the actuating factor was the promise of immense investment grants. It had to take into account not merely competitors in Canada, but in East Germany and West Germany, such as Wintershall A.G. and others. It also had to take into account the risks of deep mining, and the fact that it would be 8 years before profitability would be able to commence. But I think the most important considerations of all are the environmental conditions which have been laid down by the Conservative Government and their predecessors. These have involved hefty financial obligations.
The whole project was conceived and started in, I think, 1969, and it was worked out over a long period on the


assumption that there would be a continuous flow of grant aid from the Government. One is not going to assume that after laying out the finances this would be cut back. I give no relish to hon. Gentlemen opposite. The new allowances are infinitely superior in 9 out of 10 contexts, but in this one they are unsatisfactory.
Looking ahead, I.C.I. and Charter Consolidated, the two people involved, considered that they were looking ahead with some sort of security, and they have not got it. I think that I can evidence that by quoting from the Chairman of Charter Consolidated, Mr. S. Spiro, who said in the 1971 Report:
Although the partners, Charter and Imperial Chemical Industries Limited, have been committed to the completion of the project from the beginning and the various contracts are inter-dependent, all detailed contract items could not be settled in advance. The withdrawal of investment grants would amount to a loss of about £6 million for which alternative means of financing would have to be found. The substitution of taxation allowances would not provide compensation owing to the long period before the profit earning stage is reached. It is reasonable to expect that benefits applicable at the inception of a project will be maintained in respect of commitments and that any changes introduced subsequently will not be made retrospective.
I think that that clearly itemises the argument, but perhaps it could be linked with paragraph 5 of the White Paper issued in October, in which the Government said:
In deciding to end the investment grants scheme the Government are conscious of the need to avoid any sudden reduction in companies' cash flow and the profitability of their investment.
Surely, if I.C.I. and Charter Consolidated are to lose £6 million in investment grants, they will have to do all their assessing again, and it could make this job quite unprofitable.
If the economists throughout the country are suggesting that the Government must look forward to export potential, this is not a unique way of encouraging it, particularly when this company will be providing as much as £30 million to the balance of payments in 1990. Perhaps I should refer to one condition which may appeal to the Minister. This refers to an effluent pipeline which had to be built one mile offshore for the purpose of removing brine. When I went round the

facility some time ago, I saw the route of it, and it surprised me that one should find stringent conditions laid down by the Ministry simply to pour brine back into the sea.
11.15 p.m.
The application was made in April, 1968. A public inquiry was held in August of the same year. Outline planning permission was granted in November, 1968. However, I remind hon. Members that, according to this Bill, the cut-off date is 26th October, 1970. Had planning permission been granted prior to the cut-off date, all the contracts could well have been placed and they would have qualified. But, no. The Government Department did not decide to grant planning permission under February, 1971, after a lapse of 10 or 12 months. It means that the consortium is precluded from laying its contracts. Then, because of delay in the Government Department, it is precluded from taking advantage of the investment allowances available.
It is not the consortiums fault. It is that of the Government and their Departments. Therefore, one must look at some of the conditions to which the consortium is obligated. First, it must lay the pipeline one mile offshore. It must monitor the system both in the initial stages of the operation of the plant and after production commences. Further, it must go back to the Department for further planning permission at the end of a five-year period, and it has agreed not to claim compensation if the planning permission is withdrawn completely. That means that, if it is found that the sea is being contaminated with salt coming from the mine, the loss of the entire project is to be sustained by I.C.I. and Charter Consolidated.
The cut-off date has been settled on 20th October, 1970, and the companies are to be deprived of something like £6 million, plus all the additional costs which have been created by the delay and the inflationary process. Surely here is a cast-iron case on which the Minister should be prepared to give way. I appreciate the remarkable work of my hon. Friend the Member for Tynemouth (Dame Irene Ward) in getting a concession for the shipping industry. But it takes 6 to 8 years to get a mine into operation, and


I think that this is a case in which a similar concession should be made.
I put it even higher. In the case of an integrated contract in which some of the orders can be placed early but others will flow from a single date in 1969, it is incumbent upon the Government to give some assistance to those involved in the project.
There is a third reason. Where, as a result of delay in a Government Department, there is no decision until after the crucial date of cut-off and the company concerned cannot place it contracts, it is incumbent upon the Government to see that the company is not put at a disadvantage.
I cannot support the Minister on this matter, and I ask him to look at it again. If he cannot give a decision tonight, I shall be prepared to accept his assurance that he will reconsider it and perhaps table a suitable Amendment in the other place. But surely he should reconsider a case where there is such an outstanding anomaly.

Mr. James Tinn: As the Member in whose constituency the potash mine is to be situated, I am extremely grateful for the support for this Amendment from both sides of the House, and I hope it will be repeated in the Division Lobbies if necessary. I particularly thank the hon. Member for Middlesbrough, West (Mr. Sutcliffe) for his tremendous assistance in this connection, not only at this stage but in Standing Committee, and I pay the warmest tribute to the effectiveness of his contribution. His arguments have made my task much lighter.
The right hon. Member for Sunderland, North (Mr. Willey) said that this might cost the hon. Member his seat. I cannot pretend to wish him a long tenure in that constituency, and he would not expect me to, but I should hate this to do him damage after his sterling work.
As has already been said, the decision to develop this mine was taken a considerable time before the cut-off period. The original consultations were as long ago as 1967, when the decision to proceed was made after surveys. That decision took account of investment incentives then available and, prior to the 1966 Act, there had been remarkably little, if any,

investment in deep mining development in this country. Interest in the development came only after the passing of the Act, and this is one of the earliest and most important results. It is being called in question and gravely prejudiced and damaged as a result of the Government's action in withdrawing these benefits.
The hon. Member for Middlesbrough, West has drawn attention to the tremendous contribution this mine, when fully operational, will make to the balance of payments, rising to something in excess of £30 million a year. No other similar projects are making such a contribution to our balance of payments and that makes it seem even more churlish that the calculations on which development was planned should have been so jeopardised by what was, in effect, a retrospective decision.
The hon. Member for Scarborough and Whitby (Mr. Michael Shaw) will tell the Government of the serious unemployment in his area. This mine is only just inside my constituency and just outside his. He will confirm the unemployment position and the fact that employment is so heavily dependent on the Skinnin-grove Iron Company, part of which is being phased out with no alternative employer of size or substance coming in.
This is another aspect of the matter. The unemployment on Teesside and in the Whitby area is serious and this project will give employment to 600 people in production and to 1,000 in the construction phase.
Surely, where developers have to deal with an integrated potash mine, with all the surface treatment facilities which require to be provided, they have a right that the project should be regarded as a complete, one-up, single project. The fact that it is impossible to place all contracts to a single date should not be allowed by the Government to penalise these developers, as at present seems to be the case. Precise details, such as the specifications of the treatment plan on the surface, cannot be determined on the basis of initial survey drillings. Not until larger samples are available to the specialists as the sinking of the shaft proceeds can this information be gained. Any mining project contains massive elements of uncertainty which preclude the placing of contracts and the designing


of the entire project at any stage in advance of the commencement of the work.
The shareholders of the Cleveland potash mine found themselves committed in 1969 to financing the project right through to completion, the alternative being to write off the whole development. We are talking of 1 million tons of potash a year. Enough has been said about the total cost that will fall on the company if the Government do not make a concession. It will be about £6 million, which represents a substantial proportion of the total development cost—this falling on a project which could make a massive contribution to the balance of payments.
The Minister might have resisted this request had he not already made a concession. Had the door been shut on all claims, however justified, he might resist this one, but the door was given a tremendous push open by the concession to the shipping industry, and as the hon. Member for Middlesbrough, West pointed out, there is no reason to distinguish here between shipping and this mining project.
Indeed, this highly speculative undertaking is unlike a ship or factory, where something can be regained or sold off if all fails. One cannot sell a mine shaft or treatment works. Almost a total loss is suffered when a mine project fails. The contribution which this project can make to the balance of payments demands both sympathy and action from the Government.

11.30 p.m.

Mr. David Crouch: This Amendment has been extremely well argued by my hon. Friend the Member for Middlesbrough, West (Mr. Sutcliffe), my hon. Friend the Member for Bedford (Mr. Skeet) and the hon. Member for Cleveland (Mr. Tinn). I have seen the beginnings of the Cleveland potash mine and it is a remarkable industrial development. It is a showplace. I was there in September of last year, in company with my hon. Friend the Member for Bedford (Mr. Skeet) and a number of hon. Members from both sides of the House. We were shown this mine because it is a showplace. I was impressed then by two things. Firstly, it was obvious that very, very high cost was involved. It has been mentioned that some land

scaping is necessary for this mine, but there has never been such a landscaping for an industrial project as one can see there now. The consulting architect advising on this project is none other than Lord Holford. It is not just a question of planting a few fir trees which will grow into a screen after a time but of literally creating a hill to screen what could be thought to be the unsightly surface development of this mine in what is part of our national park in that area.
The other thing which impressed me was that, in September last year, the Cleveland Potash Company had not received permission for the long sea outfall for the disposal of the effluent. But the company was not deterred. It asked us, as Members of Parliament, to help the achievement of this decision by persuading the Government and other authorities that this should go through so that the Company would not be held up in this establishment and development. Nevertheless, one could not help but be impressed by the enormous cost involved.
When the company made this decision in 1969, a decision involving a £40 million investment, it knew that it was embarking on a six to eight year construction before it would have any adequate earnings or profits from this vast investment. But the company believed that the opportunity was a great one—an opportunity to reduce imports of potash.
For the first time in Britain we could have a potash source of our own. This potash source is not directly under the land but out to sea. As a non-mining person and not being an engineer, I was also particularly impressed by the confidence of the mining engineers in their surveys before embarking on such massive expenditure.
The company was sustained in this £40 million investment then by the availability of investment grant. There is no question but that the availability of investment grant was a very important factor in its decision. It was to give the company some compensation for the high risks involved in sinking a mine.
I do not wish to go into the other details which have been so well covered, but it must be emphasised again that there will be a great saving on our balance of payments in not a great many


years from now if this venture is successful. I have been quoted a figure of £30 million a year, and this would be reached certainly by 1990.
As I see it, Cleveland Potash is to be unfairly penalised. This legislation does not recognise this project's unique situation. That is all I seek to argue tonight. I hope that my hon. Friend will recognise the sincerity of the arguments from both sides of the House. Of course we do not like to say that there is any exception that proves the rule, but neither do we ever suppose that Governments of any colour are always infallible and can recognise every contingency. Here is a contingency that must make the Government pause and look at the very important argument that this massive investment, with no return for six or eight years, was dependent in large measure in that development period on the availability of investment grants.
I make no excuse for making a special plea for special consideration. The Government should not be intractable. I hope that they will recognise the special claim of this exceptional development.

Mr. William Rodgers: I support the thoughtful and convincing case made by the hon. Member for Middlesbrough, West (Mr. Sutcliffe). Anybody who entered the House this evening prepared to listen to what the hon. Gentleman was saying must have been convinced that the case was overwhelming. My right hon. Friend the Member for Sunderland, North (Mr. Willey) said that it would be a clear breach of a moral obligation if the Government did not accept the Amendment. The hon. Member for Bedford (Mr. Skeet) said simply that it would be wrong if the Amendment was not accepted. That fairly sums up the position if the Minister is unable to make this concession.
My right hon. Friend the Member for Sunderland, North referred to the total situation on Teesside. I shall not develop that point now, except to say that there is a crisis of confidence. I shall not attempt to describe why it has arisen. I ask the Minister to believe that it exists. It is within his capacity to play a part in remedying it.
The Minister and his right hon. Friends should change many of their policies.

Tonight he should make one small concession in answer to one of his hon. Friends. The case is powerful and overwhelming. Those of us who have served in government have been in the Minister's position. We have been told by our officials, or more often by the Treasury, that there can be no concession. When I was at the Treasury I played some part in telling other Ministers that there could be no concession.
The test of a Minister is whether he says "No" to the Treasury and to his officials. I hope that this Minister will say "No" to the Treasury and to his officials tonight and say "Yes" to the House.

Mr. Tom Boardman: In the debate on the previous Amendment the hon. Member for Chesterfield (Mr. Varley) commented with some surprise on the fact that hon Members on this side had tabled an Amendment to a Bill which we so enthusiastically supported. I and my hon. Friends have not lost any of our enthusiasm for the Bill. It would be wrong if on a Bill of this nature we on this side were not free to move Amendments on particular cases.
Amongst the whole range of the many tens of thousands of firms and the many industries affected by the Bill the debate is concentrated on one company. It is a measure of comfort to my hon. Friend the Minister that such is the success of the Bill and such is the welcome that it has been accorded that it is the one case of the Cleveland Potash Company that gives rise to this criticism.
I will not rehearse the arguments or repeat the facts about the Cleveland potash venture. The greatness of the venture, the enterprise being shown, the risks being taken, the vision of the landscaping and other developments, are common ground and hon. Members on both sides support and encourage them.
Nothing being done by private enterprise or supported by the Government would justify some of the remarks of the right hon. Member for Sunderland, North (Mr. Willey). I refer particularly to his criticism about the lack of will to bring into development areas the industry which is needed.
The Cleveland Potash Company is being unfairly treated. It is getting a raw deal. However, I wonder whether we are directing our bullets at the right target. I wonder whether my hon. Friend the Minister for Industry and the Government are the cause of the disadvantage from which the company is suffering. The company has an unusual capital structure, one which perhaps is not very usual. It is a fifty-fifty company. It is 50 per cent. owned by Chartered Consolidated and 50 per cent. by I.C.I. If the company were not in that form but were a subsidiary company of one or other of those organisations, no doubt the switch to investment allowances from investment grants would not give rise to the disadvantage that it is now suffering. There would be within that group of companies profits against which the investment allowances could be set off. If it were not a new company with a one-purpose job, a company set up to carry out that operation; if it had been carrying on business and had generated profits over a long period, and had profits from its other ventures, it would not suffer this disadvantage. But, because of these things, for six to eight years it is deprived of the benefit of the capital allowances from this very large and worthwhile investment.
I realise that my hon. Friend the Minister does not wish to create precedents or breach of principle which I fully support. But here perhaps he could make a distinction. If he feels that he cannot accept the Amendment or give an undertaking to reconsider the point, he may nevertheless feel that the cause can still be met by our right hon. Friend the Chancellor of the Exchequer making an Amendment enabling the investment allowances accruing over the six to eight years' development to get the relief, and restore the cash flow of which the company is otherwise being deprived.
It is clear that hon. Members on both sides wish to support the venture, and I am sure that the Government will share that enthusiasm for it.

Mr. Eric Cockeram: I support the pleas made by my hon. Friend the Member for Middlesbrough, West (Mr. Sutcliffe). I wish only to emphasise his final point about the element of retrospection involved in the Bill. Un

questionably, had the two parent companies been aware of the way in which the wind would blow in tax legislation they would have set up the company in an entirely different manner. They have been caught in an unfortunate situation. Because of that, and the element of retrospection, I add my plea for the Amendment.

Mr. John Nott (St. Ives): I support my hon. Friend the Member for Middlesbrough, West (Mr. Sutcliffe).
While in Opposition, we moved new Clauses on successive Finance Bills which recognised the special position of deep mining. So far only one mine has been mentioned in the debate, but many tin mines are opening up in Cornwall, and they are also affected by the Amendment.
We do not have to be supporters of the cash giant system to support the Amendment. What is being said is that a judgment was made on the basis of existing legislation. While I do not regard it as retrospective legislation, there is clearly a moral obligation on the Government to ensure that business judgments made in the circumstances that then prevailed are at least met by them in sympathy with the Amendment.
There is nothing unique about shipping, except that the Government happen to be rather more frightened on that score than they are on mining. Unless we can get a concession from them on this important point tonight, we will show that we feel just as concerned on the principle for other industries as the Government may feel about the shipping industry.

11.45 p.m.

Sir J. Eden: Every hon. Member who has spoken on this Amendment has paid tribute to my hon. Friend the Member for Middlesbrough, West (Mr. Sutcliffe). I paid my tribute to him in Committee. He has made out a forceful case for the particular company.
I am afraid that I must go back to the basic principle which lies behind the preparation of the Bill. Unless this is fully accepted, it is possible to find ways of introducing a number of Amendments which would lead to the Bill itself becoming totally different from what it is now attempting to be.
The principle enshrined in the Bill is that grant should be paid on expenditure incurred after the cut-off date of 26th October, 1970, only to the extent that the applicant was under a contractual obligation on that date to make payments to another person. The same principle was adopted by the Labour Government in 1966 to cover the transitional arrangements which were then imported.
The only difference in this case is that we have not set any time limit within which the assets contracted for must be brought into use if grant is paid. My hon. Friend's Amendment would cut right across that principle by allowing grant to be paid on plant and machinery and mining works contracted for before 27th October, 1972, in certain circumstances where the relevant section of the Mines and Quarries Act 1954 operated, namely where the sinking of a shaft had begun.
In this respect it goes wider than the Amendment put forward by my hon. Friend in Committee, under which my right hon. Friend the Secretary of State would at least have had to be satisfied that the contract for a substantial proportion of assets required for the development of the mine had been made before 27th October, 1970. This Amendment would cut across that principle, and this has been recognised by every hon. Member who has spoken; there has been no attempt by anybody to conceal that fact.
The effect of the Amendment on these mines would virtually be to postpone for two years the ending of investment grants. Since on Second Reading we brought forward a Bill which did not seek to do that but sought to do something different, it is self-evident that it is impossible for me to accept the Amendment.

The Amendment will do more than this since it would be possible, given this notice, for firms to forestall the cut-off date of 27th October, 1972, by, from now on, placing a number of contracts to be delivered and paid for a long time afterwards. From the point of view of the impact of the Bill, the situation of mines is no different from that of other industries and firms investing in new developments.

If the Amendment was accepted I have no doubt but that there would be strong pressure to extend it to other sectors of industry, possibly even to industry as a whole. This would defeat the whole purpose of the Bill, which is to end investment grants quickly to make way for a better system of investment incentives.

Those who have spoken so far have concentrated on the special position, not just of mining but possibly of deep mining and it is to that which I now want to turn—

Mr. Sutcliffe: Before my hon. Friend does so, may I put a point to him. He has based his case on the sanctity of a principle which I would have thought had already been damaged by his shipping Amendment. He has also referred to his fear that there will be an avalanche of firms wanting to get in on the act. He has mentioned, earlier, petro-chemicals and oil refineries. Could he state explicitly to what his fears relate?

Sir J. Eden: I will come to those points. The case made by my hon. Friend and other hon. Members is that mining is a special operation, justifying some form of special attention or assistance. If we are to pick out mining for special assistance then it must be related in some way directly to those problems which are special to mining. The main difficulties in mining which are special in this sense are primarily connected with exploration, as opposed to development. It was to exploration that I was referring in Committee, and to which my hon. Friend the Under-Secretary was referring on Second Reading when we said that we were seeking to do all that we could to meet these special difficulties. My hon. Friend has emphasised the special position, not just of mining, but uniquely of Cleveland Potash in its operations which are of enormous interest to the Government. It is a development which we very much wish to see proceeding. I have given careful thought to this and have held discussions with the chairmen of the two companies who are the joint owners of Cleveland Potash. However, for the purposes of the Bill, the circumstances of this development are similar in essence to the circumstances of the development of a number of other industrial projects.
In virtually all sectors of industry there are firms, large and small, undertaking


new projects with the same sort of long-lead time and with little prospect of making early profits against which they can set off capital allowances. Those are some of the features which hon. Members brought into their arguments to justify special treatment for Cleveland Potash. I am sure that in those respects they will apply to many other operations throughout industry.
The risk element has been mentioned and maybe the risk is greater in mining and deep mining transactions. It is certainly true that no matter how careful the research and development preparation has been, substantial risk is inevitable when companies embark on major new projects. I have received requests for exceptional treatment under the transitional arrangements provided for in the Bill from a number of sectors of industry. They have ranged from the large-scale chemical works to the small specialised engineering projects. Many of these companies are faced with the same situation that faces deep mining projects and Cleveland Potash. The change which my hon. Friend proposes could not be restricted to mining, nor could it, in equity, be extended selectively to meet the problems of individual firms. If the principle of the Amendment were accepted, the arrangements would have to be general, and, if they were general, it follows that they would be costly and there would be subsequent delay in the ending of investment grants over this two-year period.
My hon. Friend has suggested that there is as much reason for making special arrangements for the mining industry as there is for shipping. I do not agree with that. United Kingdom shipping still has to face unrestricted international competition without any tariff protection, often with "flag of convenience" fleets whose profits are not subject to tax so long as they are not remitted to other countries where taxes are levied. In contrast to this unrestricted competition, over half the minerals covered by the Amendment have the benefit of tariff protection.
My hon. Friend the Member for St. Ives (Mr. Nott) referred to the other mining operations which would be covered by the Amendment, and this is one reason why it is impossible for me to accept it. I do not wish to rest my

case on the general point, or on the fact that this is a breach in the principle of the Bill, but on the fact that the case for making special and unique alterations in this one company's interest should not be met in a Bill which is designed to bring investment grants to an end over a limited period.
My hon. Friend the Member for Middlesbrough, West said that this is not like other construction industry. It is an integrated unit in a special and unique way. It is not like other land-based investment but is particular to deep mining. It has a particular scale of development, it has special construction risks and there is a long lapse of time before there is likelihood of a return. Those things apply to many other sectors of industries. To accept an Amendment, or to try to devise an Amendment, which would meet the points put forward would go a long way to importing a totally new principle into the Bill, which would at once open out applications from a much wider range of industries than just deep mining operations.
For that reason I cannot advise the House to accept the Amendment. I beg my hon. Friend to recognise that this is no sign of lack of confidence in Teesside, and has nothing to do with regional issues. It is simply that a decision has been taken to bring to an end investment grants, in itself a wasteful and uneconomic procedure, and to introduce a new system which will be much better—

Mr. Nott: My hon. Friend called in aid the state of international competition when he gave his reasons for excluding shipping. Is he not aware that in practically every other country in the world mining is treated as being the exploitation of a wasting asset and that is its particular speciality? It is involved in exactly the same kind of international competition as shipping.

Sir J. Eden: It is to the particular problems of exploration in mining and the difficulties associated with it that we have been turning our attention, and it was to that that I referred in my earlier comments. We must proceed with the discussions which are taking place in that regard. I am dealing here with limited transitional arrangements to convert a system of investment grants to a new


system, and I cannot see any way of bringing in by way of an Amendment along the lines proposed special assistance to Cleveland Potash.

12 midnight

Mr. Michael Foot: I do not propose to argue the merits of this matter with the Minister for Industry. I do not think that it is necessary to do so, since the case has been put so overwhelmingly by the hon. Member for Middlesbrough, West (Mr. Sutcliffe) and by several of my hon. Friends. I do not believe that anyone listening to the debate could doubt that the case for the Amendment has been made up to the hilt. Some of us attempted to put part of this case on Second Reading. We were told then by the Minister that discussions would take place with the mining industry in order to see whether provision could be made for it in some general terms. That was the formula also used in Committee. The Minister has not even repeated that formula today. He has merely relied on the arguments which have been repudiated and refuted time and again in the debate.

Not just one firm is involved. On Second Reading, I mentioned the Tredegar Mining Company, in my constituency. It is a small firm, but it has as much right to justice as the big firms. Both Cleveland Potash and Tredegar Mining and the third company, in Cornwall, have been treated with injustice. They have been misled and now they have to suffer for it. It is no use the right hon. Gentleman saying that we cannot make exceptions. We think there are exceptional grounds on which this can be done for deep mining, as it was done for shipping, where there were also overwhelming grounds. The hon. Gentleman says that we would have to let in so many exceptions if we were to do justice. Some of us believe that that in itself is a condemnation of the Bill.
The case for the Amendment has been made overwhelmingly by hon. Members opposite and by my hon. Friends, and I suggest that the proper place for us to decide the matter is in the Lobby. If hon. Members opposite press the Amendment, we will be glad to support them.

Question put, That the Amendment be made:—

The House divided: Ayes 68, Noes 160.

Division No. 387.]
AYES
[12.3 a.m.


Armstrong, Ernest
Hughes, Mark (Durham)
O'Malley, Brian


Atkinson, Norman
Jones, Barry (Flint, E.)
Orme, Stanley


Bagier, Gordon A. T.
Jones, Gwynoro (Carmarthen)
Owen, Dr. David (Plymouth, Sutton


Blenkinsop, Arthur
Kaufman, Gerald
Parry, Robert (Liverpool, Exchange)


Campbell, l. (Dunbartonshire, W.)
Kinnock, Neil
Pavitt, Laurie


Carmichael, Neil
Lamond, James
Rhodes, Geoffrey


Clark, David (Colne Valley)
Latham, Arthur
Rodgers, William (Stockton-on-Tees


Cohen, Stanley
Lawson, George
Ross, Rt. Hn. William (Kilmarnock)


Concannon, J. D.
McBride, Neil
Sandelson, Neville


Cox, Thomas (Wandsworth, C.)
Mackenzie, Gregor
Smith, John (Lanarkshire, N.)


Davies, G. Elfed (Rhondda, E.)
Mackie, John
Spriggs, Leslie


Dell, Rt. Hn. Edmund
McMillan, Tom (Glasgow, C.)
Stallard, A. W.


Douglas, Dick (Stirlingshire, E.)
McNamara, J. Kevin
Sutcliffe, John


Duffy, A. E. P.
Mahon, Simon (Bootle)
Tinn, James


Evans, Fred
Mason, Rt. Hn. Roy
Urwin, T. W.


Foot, Michael
Meacher, Michael
Varley, Eric G.


Ford, Ben
Mellish, Rt. Hn. Robert
Wainwright, Edwin


Grant, George (Morpeth)
Millan, Bruce
Weitzman, David


Grant, John D. (Islington, E.)
Miller, Dr. M. S.
White, James (Glasgow, Pollok)


Hamilton, William (Fife, W.)
Milne, Edward (Blyth)
Wilson, William (Coventry, S.)


Hardy, Peter
Mulley, Rt. Hn. Federick



Harrison, Walter (Wakefield)
Nott, John
TELLERS FOR THE AYES:


Horam, John
Ogden, Eric
Mr. Joseph Harper and


Howell, Denis (Small Heath)
O'Halloran, Michael
Mr. James Hamilton.




NOES


Adley, Robert
Bowden, Andrew
Chataway, Rt. Hn. Christopher


Allason, James (Hemel Hempstead)
Bray, Ronald
Chichester-Clark, R.


Archer, Jeffrey (Louth)
Brewis, John
Clegg, Walter


Atkins, Humphrey
Brinton, Sir Tatton
Cockeram, Eric


Awdry, Daniel
Brocklebank-Fowler, Christopher
Corfletd, Rt. Hn. Frederick


Benyon, W.
Bryan, Paul
Cormack, Patrick


Biffen, John
Butler, Adam (Bosworth)
Crouch, David


Blaker, Peter
Carlisle, Mark
Curran, Charles


Boardman, Tom (Leicester, S. W.)
Channon, Paul
Dean, Paul


Boscawen, Robert
Chapman, Sydney
Deedes, Rt. Hn. W. F.




Digby, Simon Wingfield
King, Evelyn (Dorset, S.)
Raison, Timothy


Dixon, Piers
King, Tom (Bridgwater)
Redmond, Robert


Drayson, G. B.
Kinsey, J. R.
Reed, Laurance (Bolton, E.)


Dykes, Hugh
Kitson, Timothy
Rees-Davies, W. R.


Eden, Sir John
Knight, Mrs. Jill
Renton, Rt. Hn. Sir David


Edwards, Nicholas (Pembroke)
Knox, David
Ridley, Hn. Nicholas


Elliott, R. W. (N'c'tle-upon-Tyne, N.)
Lane, David
Roberts, Michael (Cardiff, N.)


Emery, Peter
Legge-Bourke, Sir Harry
Roberts, Wyn (Conway)


Eyre, Reginald
Le Marchant, Spencer
Russell, Sir Ronald


Farr, John
Longden, Gilbert
Scott, Nicholas


Fenner, Mrs. Peggy
Loveridge, John
Shaw, Michael (Sc'b'gh &amp; Whitby)


Fidler, Michael
Luce, R. N.
Sheiton, William (Clapham)


Finsberg, Geoffrey (Hampstead)
MacArthur, Ian
Soref, Harold


Fortescue, Tim
McCrindle, R. A.
Spence, John


Fowler, Norman
McLaren, Martin
Stanbrook, Ivor


Fox, Marcus
Maginnis, John E.
Stuttaford, Dr. Tom


Gibson-Watt, David
Marten, Neil
Taylor, Sir Charles (Eastbourne)


Goodhart, Philip
Mather, Carol
Taylor, Edward M.(G'gow, Cathcart)


Goodhew, Victor
Mawby, Ray
Taylor, Frank (Moss Side)


Cower, Raymond
Maxwell-Hyslop, R. J.
Taylor, Robert (Croydon, N. W.)


Grant, Anthony (Harrow, C.)
Meyer, Sir Anthony
Thatcher, Rt. Hn. Mrs. Margaret


Green, Alan
Mills, Stratton (Belfast, N.)
Thomas, John Stradling (Monmounth)


Grylls, Michael
Mitchell, Lt.-Col. C.(Aberdeenshire, W)
Thompson, Sir Richard (Croydon, S.)


Gummer, Selwyn
Molyneaux, James
Trafford, Dr. Anthony


Gurden, Harold
Monks, Mrs. Connie
Trew, Peter


Hall, Miss Joan (Keighley)
Monro, Hector
Tugendhat, Christopher


Hall-Davis, A. G. F.
More, Jasper
Turton, Rt. Hn. Sir Robin


Hannam, John (Exeter)
Morgan, Geraint (Denbigh)
van Straubenzee, W. R.


Harrison, Col. Sir Harwood (Eye)
Morison, Charles (Devizes)
Vaughan, Dr. Gerard


Haselhurst, Alan
Mudd, David
Waddington, David


Hawkins, Paul
Murton, Oscar
Walder, David (Clitheroe)


Hicks, Robert
Nabarro, Sir Gerald
Walker, Rt. Hn. Peter (Worcester)


Hill, John E. B. (Norfolk, S.)
Neave, Airey
Ward, Dame Irene


Hill, James (Southampton, Test)
Normanton, Tom
Warren, Kenneth


Holt, Miss Mary
Onslow, Cranley
Weathertill, Bernard


Hornby, Richard
Osborn, John
Wells, John (Maidstone)


Howe, Hn. Sir Geoffrey (Reigate)
Owen, Idris (Stockport, N.)
White, Roger (Gravesend)


Howell, David (Guildford)
Page, Graham (Crosby)
Wilkinson, John


Howell, Ralph (Norfolk, N.)
Parkinson, Cecil (Enfield, W.)
Worsley, Marcus


Hunt, John
Pink, R. Bonner
Wylie, Rt. Hn. N. R.


Hutchison, Michael Clark
Pounder, Rafton



James, David
Powell, Rt. Hn. J. Enoch
TELLERS FOR THE NOES:


Kaberry, Sir Donald
Proudfoot, Wilfred
Mr. Keith Speed and


Kellett, Mrs. Elaine
Pym, Rt. Hn. Francis
Mr. Hugh Rossi.

Further Amendments made: No. 5, in page 2, line 8, after 'him', insert:
'or, if he is a member of a group, to any other member of that group'.

Amendment No. 6, in page 2, line 11, after 'he', insert:
'or, as the case may be, the other member of the group'. [Sir J. Eden.]

Sir J. Eden: I beg to move Amendment No. 7, in page 2, line 13, at end insert:
(3A) Where a person was on 26th October 1970 entitled to the benefit of a contract for the construction of a new ship, subsection (1) above shall not prevent the making of a grant under the said Part I in respect of expenditure incurred by that person or, if he is a member of a group, by any other member of the group in the provision of the ship, or of any ship appearing to the Secretary of State to be of the same or substantially similar description thereto and supplied in substitution therefor, so far as that expenditure either consists of a sum or sums falling due under a contract made before the said 27th October or is in respect of goods or services supplied on or before the date on which the ship is delivered.

In Standing Committee, I said that I would have detailed discussions with the Chamber of Shipping with a view to devising a form of words which would meet the substance of arguments deployed by my hon. Friend the Member for Tynemouth (Dame Irene Ward). Without agreeing with her completely and without opening the door too wide, we have had those discussions and the Amendment is the outcome.
In order that grant may be payable, the expenditure must relate to goods or services supplied on or before the date on which the ship itself is delivered. I understand that the date of a ship's delivery is one which may be readily determined in every case. The parts need not actually be delivered to the ship on or before this date, but they must be delivered to the ship or the ship owner, for example, to his warehouse, on or before that date. The Chamber of Shipping agrees that that is a sensible and reasonable limitation.
There are four other points. First, if a ship's extras or parts were the subject of a contract made before 27th October 1970, that is to say, if they were included in the main shipbuilding contract, or subject to a separate contract made before that, this limitation as to the delivery date does not apply. Secondly, the Amendment allows, as do Amendments Nos. 5 and 6, grant to be paid where one member of a group incurs expenditure as a result of the transfer to it by another member of the group of the benefit of a contract made before 27th October.
Thirdly, where a contract made before 27th October has, since that date, been varied or replaced by a new contract, grant will only be paid if my right hon. Friend is satisfied that the ship to be supplied under the varied or new contract is in substitution of the ship as contracted for on 26th October and is of the same or a substantially similar class or description. If he is not so satisfied, it follows that no grant will be payable.
Lastly, expenditure to attract grant will still have to qualify as "approved capital expenditure" as defined in Section 13(1) of the Industrial Development Act, 1966. It has to
appear to the Secretary of State to be of a capital nature and to be approved by him for the purposes of grant".
He does not intend to approve expenditure which is not directly related to the provision of a ship or its extras or expenditure which seems to him to be unreasonable in relation to the type of ship provided.
I also remind the House that the provisions of the Industrial Development (Ships) Act, 1970, will continue to apply and in that way protect our balance of payments.
This is a useful step forward, recognising the points which were raised in Committee. I hope that it will commend itself to the House.

12.15 a.m.

Mr. Varley: We are obliged to the Minister for his explanation. We think that this is a sensible approach to the matter, although we would much prefer to see investment grants continue indefinitely for the shipping industry. However, in the context of the Bill, this

is a reasonable concession. I understand that the Chamber of Shipping has expressed satisfaction with the arrangements.
On behalf of the Opposition, I must claim some credit for getting the Government to look at the matter again. Had it not been for a united Opposition in Committee, the suggestion by the hon. Member for Tynemouth (Dame Irene Ward) would not have been accepted. I am only sorry that a similar concession was not given to the hon. Member for Middlesbrough, West (Mr. Sutcliffe) on the matter which we discussed previously.
As I said, this is a sensible approach to the matter. However, I am surprised that the Minister has not taken the opportunity to explain to the House how he sees the shipping industry developing over the next few years. It would have been wholly appropriate, because in Committee the hon. Gentleman said that he could possibly make the concession which he has just announced—I do not think that he used these words—to the hotch-potch of subsidies to shipping which exist throughout the world, because tonight he has referred to the special considerations given to and the special position of shipping throughout the world.
I should like to support my point by referring to The Times of last Tuesday, which, in a lead article headed "Tragedy of the Clyde" directly relating to this matter, stated:
There is a world-wide boom in ship construction, but with the removal of investment grants the British industry is now at a marked disadvantage in competing for orders, compared with almost all its overseas competitors.
That is the case. We all know of yards which are in difficulties. It may be that we shall have something to say about that on Third Reading.
I should like to probe the Government on the O.E.C.D. meeting which started today. I understand there are to be three days of discussions in Paris where they are trying to align all the varying subsidies and measures so that the world shipping industry can make some sense and get on a better basis.
I should like some information from the Minister about this conference, or these talks as they are called in this article. It says that the United Kingdom is represented. Is the United Kingdom represented


by officials, or by a Minister? Do the British proposals cover the Amendment? I should be grateful if the Minister would answer those questions, because these issues are of considerable interest to those who work in the shipping industry.

The Amendment has our support. It does not go far enough, but it is a concession, and we recognise it as such.

Mr. Dick Douglas: I, too, welcome the Amendment, because, while acknowledging the pressure exerted by the hon. Lady the Member for Tynemouth (Dame Irene Ward), I think I can say that during the Second Reading debate we referred to the serious plight of the shipping industry in relation to the cut-off date for investment grants.
I must press the Minister to give us some information about the relationship between his Department and the industry in the processing of these grants. Will the Department ascertain when the ship and the parts were contracted for before 26th October, 1970? What machinery is there in the Department for liaising between the Department, the shipping company, and the shipyard?
I raise this matter because during the past week certain doubts have arisen about the efficiency of the Department in liaising with the shipping companies and shipyards involved. We are grateful that parliamentary pressure can be brought to bear on the Minister, and for the fact that the Ministerial mind can be changed—and the hon. Gentleman deserves credit for introducing the Amendment—but I do not think that the previous association between his Department and the shipping companies earns the same credit.
I have in mind the fact that shipping companies were in consultation either with the hon. Gentleman's Department, or with the Shipbuilding Industry Board, to obtain credits for ships that were being built by U.C.S. last October. The credits were held up from October until February, with the resulting crucial damage to U.C.S. If that could happen, what guarantee has the House of this favourable provision in the Amendment reaching the shipping companies concerned?
Because of the ending of the Shipbuilding Industry Board, we are con

cerned about the processing of investments and building grants between the industry and the shipyards. Am I correct in thinking that if ships building at U.C.S., which have investment grant sanction, are transferred because of difficulties in the restructuring of that company, provided that the order was placed before 26th October, the new company taking on the order will be entitled to an investment grant for the ship, or will the guillotine fall on 26th October?
I am concerned at the apparent mishandling of credits. As I understood it, the process was that the Shipbuilding Industry Board looked at the viability of the shipping company, while the ship mortgage finance corporation looked at the shipyard. In the case of the U.C.S., the process seems to have been reversed. As I understand it, we had the S.I.B. examining the viability of the shipyard and pronouncing upon it.
I am concerned to ensure that this Amendment contains a provision which is favourable to the shipping industry and, indirectly, to the shipbuilding industry. However, previous experience of Government mishandling of the industry has sapped the confidence of our shipowners and shipbuilders. I do not want to cross swords with those of my right hon. and hon. Friends who spoke in the debate on the previous Amendment, but they have given the impression that the shipping industry has been treated extremely favourably in this Amendment. The Amendment gives the industry no more than its due.
In view of the events of the past week, serious damage has been done to the industry's confidence, and I think that the Government owe the House an explanation of their conduct in this affair.

Sir J. Eden: With the leave of the House, perhaps I might reply briefly and deal first with one or two of the points made by the hon. Member for East Stirlingshire (Mr. Douglas).
The instances that I gave earlier were intended to indicate that, when the transfer of a contract takes place between members of a group, the provisions of the Amendment will still apply. In the case of U.C.S., if a shipowner had a contract before 27th October and it is taken over by another shipyard, the grant under the Bill will still be payable to the shipowner who made the original


contract, provided that the ship remains of a substantially similar class or description. That is the essential point there.
The hon. Gentleman then went a little wider and brought in a number of other points which are probably better discussed in a general debate on the shipping industry. But I assure the hon. Member for Chesterfield (Mr. Varley) that we are keeping closely in mind the developments at the O.E.C.D., and we are watching what is taking place there. At this stage, I cannot add anything further about the arrangements in this country.

Amendment agreed to.

Further Amendment made: No. 8, in page 2, line 38, at end insert:
'and for the purposes of this section, a group consists of a body corporate together with all other bodies corporate which are its subsidiaries within the meaning of section 154 of the Companies Act 1948'.—[Sir J. Eden.]

12.30 a.m.

Sir J. Eden: I beg to move, That the Bill be now read the Third time.
The main object of this Bill is to put an end to the system of investment grants as quickly as possible, to pave the way for a different and better system of investment incentives.

Clause 1, Subsection (1), achieves this in a simple way by prohibiting payment of investment grants on expenditure incurred after 26th October, 1970; and after that date the new and improved capital allowances will apply. This provision, in itself, avoids retrospection, since all expenditure incurred up to the date when we announced the change will qualify. But we have gone even further to avoid retrospection in our readiness to continue investment grant on expenditure to which a firm was legally committed on 26th October.

Obviously, some firms will not receive all the investment grant that they would have done had the system remained; and that they might at one time have expected, but if the Clause were to have this effect we should really not be making transitional arrangements so much as postponing the change altogether. We have adopted the same principle of transitional arrangements as did the previous administration in 1966, except that in ours there is no time limit within which the assets must be brought into use to qualify for grant.

The Clause has been amended in two respects since it was introduced. Under the first Amendment a new ship is looked at as an entity and grant can be made on all approved capital expenditure on it, provided a contract for its construction has been made before the cut-off date and provided the "extras" are delivered at the same time, as or before, the ship itself is delivered. This is in recognition of the shipping industry's special international trading position.

The second Amendment is somewhat technical, but none the less important, and removes a particular difficulty encountered by some groups of companies. It is generally agreed that this is right.

We have also set a time limit within which applications for investment grant must be made. This is a sensible move and I am sure that no hon. Member would wish applications to drag on indefinitely. We have sought to give plenty of notice before the first limits come into force, and we shall continue to do so.

Clause 1 has attracted most attention in debates so far and as a result, Clause 2 has somewhat gone by unnoticed, but it makes important provision for improving assistance to industry by way of building grants in the Local Employment Acts. These improvements have been approved by the House without alteration and almost without attention, and certainly without objection.

I do not want to comment on them in detail, but the increase in the rates of building grant in development areas means that industrialists building or extending their premises and thereby creating new employment in those areas, can look to receive a substantial contribution of 35 per cent. in some cases or 45 per cent. towards their costs.

This increase, together with the other extensive improvements which we have already made in the assistance available under these Acts in development and intermediate areas, the continuation of the 40 per cent. initial allowance for industrial building, and the new system of capital allowances for plant and machinery, make up a most substantial and relevant package of incentives for industrial investment in areas of greatest need.

Mr. Michael Foot: Will the Minister answer a question which is relevant, but which I have not earlier had an opportunity of putting? It is about building


grant. What would happen if someone in charge of deep mining applied for a building grant to carry out his tunnelling?

Sir J. Eden: There is no reason why mining operations, as well as any other operations, should not qualify for the provisions of the Local Employment Acts. If they do so, and insofar as it can help, it would be of some significance for them.
In relation to the previous discussion, this was recognised by my hon. Friend the Member for Middlesbrough, West (Mr. Sutcliffe), although he pointed out, as I now do, that it would not go so far as to compensate for the loss of grant expectation which resulted from the changeover in their case. There is no reason why they should not qualify for the same provisions as anybody else in development areas under the Local Employment Acts.
These are the two parts of this important Bill, which will make a substantial and relevant contribution to the investment plans of industry, and particularly of the needs of development and intermediate areas.

12.35 a.m.

Mr. Varley: The Minister is right in saying that this is a two-part Bill. Governments have the capacity for putting good and bad together, which is what they have done in this case.
It will come as no surprise to those who have followed our debates on this Measure that we take the most serious objection to Clause 1 because of the consequences that will result from it. It has been made clear that the transitional arrangements are not satisfactory and that industry, and particularly employment prospects, in the weaker regions of Britain have been plunged into a certain amount of confusion by the manner and method in which the Government have introduced the Bill in general and Clause 1 in particular.
It is clear to all concerned that the Government have in many respects let industry down. That was made plain in the earlier remarks of hon. Gentlemen opposite. In view of the Conservative manifesto and what the Secretary of State for Social Services said when in opposition, one cannot blame industry for feeling it has been let down badly, particularly by the transitional arrangements.
After 27th October of last year the chemical industry was thrown into complete confusion over the changes. The Shell-Carrington project was postponed, though I have been pleased to learn that Shell is now going ahead with the project; but valuable time was lost because of the change-over.
We have heard how mining has been badly affected when one would have thought that assistance would have been given to mining undertakings. A lot was said about only one project, the I.C.I. one, being affected, but it has been made plain that others have been involved. We have heard about the Tredegar Mining Company and the mining firm Wheal Jane in Cornwall. Mining generally, and not only in the sense mentioned by the hon. Member for Middlesbrough, West (Mr. Sutcliffe), has been hit.
The N.C.B. has been affected, not in its deep mining operations but in its peripheral activities, which attracted investment grants. For example, the Abernant plant, a £5½ million scheme, was due to be set up to produce smokeless fuel. It would have attracted £2 million in grant, but it was abandoned. The country having suffered a winter without adequate supplies of smokeless fuel, it was a tragedy that this project was abandoned and is not now going ahead—this in South Wales in a development area.

Clause 1 will also create problems for the shipping industry. We all know about the difficulties of Upper Clyde Shipbuilders. I do not know to what extent the withdrawal of grants on future projects has affected U.C.S. I will not go into that because I have mentioned it once this evening. Other shipping yards will be seriously affected. Swann Hunter returned very bad results last week. Only last year Sir John Hunter said that the company would not have made a profit had it not been for R.E.P. Goodness knows what will be the effect when the withdrawal of grants takes place.

Every time I see the hon. Member for Belfast, South (Mr. Pounder) I am reminded that at least Harland and Wolff will continue to receive investment grants. Within the United Kingdom framework we have the difficulty of the very confused situation. The degree of protection in the policies of governments throughout


the world makes shipbuilding and the shipping industry a complete jungle. I hope that at the O.E.C.D. meeting Britain will make a realistic contribution to the discussions and see whether some of these matters can be sorted out.

I must mention the British Steel Corporation and the effect of the withdrawal of grants on the steel industry. It is calculated that the ending of investment grants means a loss of about £100 million to the Corporation. When we have the Government boasting, as they do, that they have held down the price of steel, which means effectively that the industry will show substantial losses, at the same time as the Under-Secretary said in Committee that all would be well with the British Steel Corporation because once it started to make profits it would be able to take advantage of the tax allowances, that is a nonsense, because the price of steel is being held artificially low, the Corporation will never benefit and as a result valuable projects will not go ahead.

The biggest indictment of all is the impact that Clause 1 will have on Britain's weaker regions. There is no doubt that the ending of grants has done a great deal to increase unemployment in the development areas. The number of inquiries by industrialists about investment in development areas has fallen dramatically. The Secretary of State for Trade and Industry confirmed this in his statement to the House on 10th May, when he said that, taking the first quarter of 1970 and comparing it with the first quarter of 1971, inquiries had gone down dramatically. The reduction was about 60 per cent.

Only last Thursday The Times reported about many companies cancelling projects in Wales. There was a summary of a survey in The Times, which said:
' Fifty-two firms which had planned to invest in new projects in Wales have cancelled them in recent months, it is revealed in a survey carried out by the Confederation of British Industry.

I want to be absolutely fair about this. The ending of grant is not the only matter. The report goes on:
The survey, which was carried out immediately at the time of the Budget in March, drew replies from 196 firms, almost exactly half of which had been intending to go ahead with new schemes.

The most important reason given for the cancellation is reduced demand. The switch away from investment grants to tax allowances, the cost of external finance, lower profitability and extended credit taken by customers resulting in liquidity problems are also mentioned as significant factors.

It is quite obvious that the withdrawal of investment grants has meant cancellation of some of these projects. It is interesting that the article also says
But comparatively few firms mentioned fear of the effects of rising wages or labour disputes as their main reason for dropping projects.

We are constantly told that all the problems in industry and the downturn of investment are the result of greed on the part of avaricious trade unionists. The survey makes the position clear.

It is not only Wales. The Confederation of British Industry conducted a survey in Scotland. The report in The Times of 14th May said this:
The Confederation of British Industry now argue that, in a situation of chronically low investment, it might have been wiser to retain Labour's cash grants.

So again there is ample evidence that the prospects for the development areas are very serious, and the unemployment trends show clearly that the differential is widening. Those with experience of promoting job opportunities in the development areas have all shown over the past few months what a bad effect the ending of grants has had.

Mr. Fred Dawson, the Director of the North-East Development Council, has been extremely critical. Alderman Arthur Grey, the Leader of the Newcastle Tories, has been very critical. I hesitate to mention Viscount Ridley again. He is the brother of one of the Under-Secretaries in the Department and he is very critical. The T.U.C. in its Economic Review has expressed concern. Even the C.B.I. in its annual report said that a more flexible approach should be taken. The Minister for Industry knows that the C.B.I. has said that it would have been better to have allowed grants to have continued for industries such as mining, because grants would have been more effective. There has been no flexible approach.

We explained on Second Reading that five out of six members of the European Economic Community, to say nothing of Ulster, had direct investment grants for


industry. If the House agrees to take Britain into the Common Market, no doubt harmonisation policies will require to British Government to restore what they are now taking away by Clause 1. Again, we showed on Second Reading how the ending of grants could be directly related to the weakening of investment generally. This was shown in an article in yesterday's Financial Times by Mr. Samuel Brittan in which he said some very powerful things directly relating to this point; he said that the flexibility of the investment grants as they were used in 1967 and 1968 could have been used in an effort to reflate the economy, in a manner which would stimulate longer-term growth and not so as to suck in a lot of imports and put our balance of payments in chronic disequilibrium.

Even this Government has already used investment grants to help industry in a flexible manner. A few months ago the Secretary of State for Trade and Industry announced that he had brought forward the payment of grants on expenditure already incurred to help firms with liquidity problems. That was a once and for all operation. Never again will investment grants be used in that way. The Secretary of State was quite proud when he was able to tell the House that he could bring forward the payment to ease the problems of firms, but he will not be able to do that again. Before the General Election we were told that if the Tories were returned to power there would be a thorough-going study of the regional incentives for industry. No such study has taken place. The grants were ended at a stroke, creating all the confusion about which we have heard tonight in mining and chemicals and within the development areas. Investment levels, which grants helped, have all taken a dramatic dip and business confidence is at an all-time low.

The Government will regret introducing Clause 1 to end investment grants. Even at this late stage they would be best advised to drop it.

12.51 a.m.

Mr. Neil Kinnock: I will not detain the House long. [HON. MEMBERS: "Hear, hear."]—I am glad to have the acclaim of hon. Members opposite. I hope that I shall have a similar reception when I sit down.—

[HON. MEMBERS: "Hear, hear."]—for the right reasons.
I want to take up two points made by my hon. Friend the Member for Chesterfield (Mr. Varley), referring specifically to the report recently published by the Confederation of British Industry in Wales on the survey of investment intentions. The figures produced by the C.B.I. put the matter of investment grants versus investment allowances into its true perspective. They are the product of the researches of people with no axe to grind, other than the entirely objective one of industrial potential. On that basis, we can afford to lift ourselves above the simple party squabble to consider the most efficacious way to encourage job-provision in the regions, and get down to cases.
I have here a copy of the questionnaire sent out to firms in Wales and returned to the C.B.I. by 194 firms. It gives a breakdown of the first reasons selected by each firm for cancelling its plans for new investment. This is a grave document. The findings of the questionnaire have the most serious implications for the development of all the regions. I and some of my hon. Friends are most closely concerned because we are talking about the constituencies and workers that we represent.
Asked whether they had recently cancelled plans for new projects, 52 of the firms answered "Yes", and 16 said that this was because of reduced demand for their products. That is a reflection of the stagnation and the drop in demand throughout the economy.
In Committee the Under-Secretary correctly told us that much of the difficulty encountered by British industry was of a general economic nature. But he said it in a way that would lead us to believe that the Government have little or no responsibility for the way in which the economic affairs of the country are conducted. Nothing could be further from the truth.

Mr. Gerald Kaufman: It is true that the Government have little or no control.

Mr. Kinnock: That is through their clumsiness, not design. They cannot wash their hands of responsibility for creating demand.
We have made continual appeals from this side of the House, and appeals have been made from both sides of industry, not least from the C.B.I., the National Institute of Economic and Social Research, the T.U.C. and individual trade union conferences, for the Government to reflate the economy and start talking seriously about meeting the problem of unemployment and the drop in demand. That is the most important reason given by the C.B.I. for the cancellation of new investment. I ask the Government to take the problem most seriously.
In the context of the Bill, which in the short term will mean less cash available to firms for development in the regions, this is a sad measure in a time of capacity cancellations and employment despair.
Nine of the firms gave lower profitability as their reason for cancellation of new projects. Again, this is linked with a drop in demand, and the Government must take partial responsibility. Ten of the firms said they had difficulties in regard to the extended credit required by customers. Customers obviously require extended credit because they have not the cash. In some respects this is due to inefficiency, and in most respects it is the Government's fault for not creating a climate in which there is enough business confidence to encourage firms to pay up on time. The loss and the availability of external finance was used by 15 of the firms as a reason for cancelling projects. This is a direct argument for saying that cash grants are required to provide a cheap method of financing new projects.
The effect of rising wages was taken by only four out of 52 firms as a reason for not embarking on new projects. So much for the great wage explosion about which we are always being told by right hon. and hon. Members opposite. It is complete nonsense to adduce wage inflation as a reason for the cancellation of investment. Of course wages and prices have inflated. I said a year ago that this would happen all over the world. We were told that the Conservative Government would reduce them at a stroke, but nothing has been done about the situation, except that a vicious and dogmatic stand has been taken against the weakest section of the community.
The change in investment incentives, announced on 27th October, was given first priority as a reason for the cancellation of projects by nine firms, some 11 per cent. of the answers. It might be said that this is not a significant proportion, but added to that a further five firms said they had cancelled projects because of uncertainty generated by the change and by the lack of decision by the Government about the future of regional policy.
This adds up to a substantial total of 17 per cent. of firms who said they were cancelling projects because of the kind of measure we are debating tonight. [Interruption.] Hon. Gentlemen opposite are buzzing among themselves. That is just about the busiest thing they will do; they are talking up their sleeves.
The fact remains that a significant proportion of firms which have cancelled projects have done so as a result of current Government policy. [HON. MEMBERS: "No."] Hon. Members who interrupt from a sedentary position show some lack of courage, as they do in many other respects. Two out of the 52 firms gave a high priority to labour disputes as a cause for cancelling projects. So much for the effectiveness of the Industrial Relations Bill.
I quote from the article by Samuel Brittan in the Financial Times, which has already been mentioned by my hon. Friend the Member for Chesterfield:
Whitehall has undoubtedly been shocked by the latest investment intentions surveys and will try to find some way of encouraging capital spending in industry…. The one proven method of doing this is a strictly temporary financial concession ending on an announced date. This is the principle behind the Swedish anti-cyclical tax concession …

Mr. Deputy Speaker (Miss Harvie Anderson): Order. The hon. Gentleman has been allowed a very wide range. I hope he will not take advantage of it.

Mr. Kinnock: I am not entirely sure what you mean by "wide range", Mr. Deputy Speaker. I am quoting something which is strictly relevant to this Bill on the matter of investment and building grants.
What Mr. Brittan went on to say was:
There is no reason why there should not be a similar temporary increase in the investment allowances which are to replace grants, or even why free depreciation for investment


undertaken in a limited period should not be introduced.
Mr. Brittan was saying that to counteract the stagnation in industry, the rise of unemployment and the increasing lack of confidence generated by the Government's policies, we should in some way adopt a policy which would speedily generate new investment.
I maintain, along with my constituents and the majority of the population in the regions, the strongest possible criticism of this Bill and I look forward to the day when a Labour Government will reverse in toto this dogmatic measure.

1.0 a.m.

Mr. Peter Hardy: If we, unfortunately, go into the Common Market, it may be that we shall have to comply with the Common Market financial practice and reintroduce the grants system. If we have to put up with a value-added tax, we should certainly be expected to put up with something which offered a great deal more.
I do not intend to speak for long, but I make no apology for detaining the House at this hour since I believe that this Bill will most adversely affect my constituents. I regard it as a Bill to be deplored. I was not on the Committee but I read the proceedings with interest and I spoke on Second Reading.
On Second Reading the House was under the impression, later corrected by the Secretary of State, that since the Bill had been introduced there had been a dramatic rise in the number of inquiries for the development and intermediate areas of the country. The Secretary of State had to apologise and correct this erroneous impression. He suggested that there had been a dramatic increase, but we find that there has been a reduction of 55 per cent. in the number of inquiries relating to the development of industry in the areas of Britain where industrial development is so necessary.
Since the House was then under the impression that the proposals in the Bill had so dramatically improved the situation, one would have thought that when the justification for the Bill was removed it would be reasonable and even honourable for the Bill to be removed, too.
There are some points that are worthy of re-emphasis. In the Sunday Times last Sunday the Prime Minister listed 79

promises which the Conservative Government had already redeemed. One promise was that there would be a thoroughgoing study followed by the swift removal of the industrial incentives available until this Bill is made law. I wonder whether the Prime Minister regards the thoroughgoing study as having been completed, and whether he regards that as one of the promises which he kept? The Confederation of British Industry has said that it does not like this Bill because it will bring about a decline in the value of the incentives offered to industry. It suggests that it is not sufficiently flexible in that it does not allow exceptions to be made so that grants can be provided where these are vital. That is an important point. It is perhaps one of the few occasions on which we can find words uttered by the C.B.I. worthy of attention on this side of the House.
My hon. Friend the Member for Flint, East (Mr. Barry Jones) made an important contribution in Committee when he gave a brief historical appraisal of the development of regional and industrial incentives in this country. He showed how improvements have been made since the Special Areas (Development and Improvement) Act, 1934, and the Special Areas (Amendment) Act 1936, and we can see from that time the gradual improvement in the provision of aid to the areas which most need it. That improvement has been, perhaps, spasmodic but there was improvement in those areas until 26th October, 1970. That was an extremely black day for Wales, Scotland and the north of England.
In Committee a Conservative Member stressed that unemployment grew during the years of Labour Government. His interpretation was rather superficial. He, like so many members of the Conservative Party, overlooked the great change that was taking place in British industry, the decline of the traditional industries, and the tremendous development of automation, with its inevitable redundancies and changes in employment. Between 1965 and 1970, although many thousands of people lost their jobs and unemployment rose, thousands of new jobs were created, most of them as a result of the Labour Government's policy of investment allowances. If there is to be the continuing development of automation and technology which is essential if we are to make our way in the world, and if


we are to compensate for the change by providing new jobs and encouraging industrialists to develop, there must be no deterioration in the prospects which are afforded.
The Minister is entirely wrong in assuming that the previous system was wasteful. He said on Report that we should wind up investment allowances quickly so as to introduce a better system. Those words will prove to be a misinterpretation of a serious situation, and I hope that within the next twelve months, as unemployment continues to increase, the Government will have another look at this.
In March I asked the Secretary of State for Employment about unemployment in my constituency. The rather complacent answer was that unemployment in March, 1971, was lower than in March, 1970. This was true. The unemployment rate in March, 1970, was lower than in March, 1969, by virtue of the Labour Government's assistance to intermediate areas such as mine. But, since March, 1971, there has been a serious increase in unemployment, which is already worse than at any time since 1940–45. The advantages we were given under the intermediate area provision are eroded, and the situation in my constituency gives grounds for concern.
I hope that the Government will reconsider the situation within twelve months before so much harm is done that decades will have to elapse before it can be made good.

1.9 a.m.

Mr. Kaufman: If one thought about party rather than about the country, one could view the Bill with a great deal of satisfaction because it is another example of the way in which the Government are relentlessly destroying themselves by dogma. Just as in the Budget—which was in March, not in April, as the Prime Minister pretended in the interview published in the Sunday Times—the Government gravely damaged their fight against inflation by cutting S.E.T., as they had promised to do, rather than cutting purchase tax which would have had a far greater immediate effect on inflation and the wage /price spiral, so the abolition of investment grants has deprived the

Government of a major weapon of reflation.
It is generally agreed among all economic commentators at the moment—although not, of course, in the Treasury, which always lags behind all economic commentators and has been the destruction of Governments of both parties and will be the destruction of this Government as it was of the last—that substantial and immediate reflation is necessary if the Government and the country are to survive this recession, get out of it and get on to the growth which the rapidly-waning balance of payments surplus which the Labour Government bequeathed permits.
Yet what kind of reflation can we have? Two kinds are possible. One is, as my hon. Friend the Member for Chesterfield (Mr. Varley) pointed out, a consumer-led reflation which causes growth and employment but sucks in proportionately far more imports and is therefore damaging to the balance of payments and damaging to the long-term future of the country. The other is an export-led and investment-led reflation, and investment grants are an ideal way of spurring this kind of reflation because they pump money into industry. Unlike selective employment tax, they pump money into productive industry; because they are selective, and have been regionally selective, they pump money into the regions which need it most and therefore provide a non-consumer-led reflation of precisely the kind the country requires.
Yet this lunatic Government are depriving the country of this weapon, which could get us back on to growth and save this lost production and unemployment we are suffering. If one simply looked with satisfaction on the prospect of the destruction of this Government, one could be satisfied by the fact that the Bill will shortly become law. But if one believes that the destruction of the Government is less preferable than saving the country, one can only bemoan the fact that the blindness of the Government is causing them to proceed with this extremely damaging Bill, which takes away from the Government a major weapon for reflation and for expanding opportunities of employment and therefore for putting this country back on the path of economic growth once again.

1.13 a.m.

Mr. Gwynoro Jones: This Bill is of great concern to development areas such as Wales, Scotland and the North of England. With the abolition of investment grants, the Government have passed judgment on a system which had only been in operation for three years. For many years previous to that, we had a system very similar in many respects to investment allowances. So it is only right and proper that we should make a comparison of what investment allowances achieved and what investment grants achieved in their very short period of existence.
From 1960 to 1964, the investment allowances meant that 63 new manufacturing firms came to the Principality of Wales; under investment grants, from 1967 to 1970, a total of 196 new manufacturing firms came to the Principality and well over 30,000 new manufacturing jobs were created. I concede that the jobs lost in the declining industries such as mining were greater in number, but without the investment grants there would not have been this influx of new jobs into development areas such as Wales.
One of the reasons given for the abolition of the investment grant system is that industrialists were throwing money away. Hon. Members opposite have a very low opinion of their colleagues and friends in industry if they think that. The reverse is true. Anyone could have predicted the results of the C.B.I. survey.
A Parliamentary reply to my hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon) showed that the new policy will reduce the advantage of development areas over non-development areas. The Minister referred to the discounted cash flow method and gave as an example an investment of £100 and an asset life of ten years. Under investment grants, an industrialist would benefit to the tune of £52 in a development area and £39 outside, a differential of £13. Under the new system, the figures would be £36 in a development area and £32 outside, a differential of £4. So the new system is to the benefit of the non-development areas. This is one of the reasons why the C.B.I. on Wales is finding it most difficult to accept this change.
In the development areas over the last few years, the small firms in the initial

stages of development have not been making a profit. Hundreds of these firms are coming to Wales, but, under investment allowances, not one will be able to benefit until the day it makes a profit. Most of these firms want money to meet the teething troubles of the first few years. The abolition of investment grants denies them this.
With the announcement of the Government's intention last October began a steady decline in job opportunities and industrial inquiries. In early 1970, most responsible economic correspondents and professors in the University of Wales were confident of a bright future for the Welsh economy. The Times and the Financial Times carried articles to this effect.
Now, those same commentators and professors are predicting a different situation. Industrial inquiries are now at an all-time low since the development area policy of the mid-1960s came into being. Unemployment in Wales has increased since June by 30 per cent., a total of 11,000 people. It is no use hon. Members opposite saying that this was an increasing trend: it was not. In the early part of 1970. the trend was certainly downwards. It had stabilised and was not increasing.
When the Labour Government left office, the number of jobs in prospect in the Principality over the four years 1970–74 was more than 30,000, but in a Parliamentary Answer the other day the Minister for Employment said that the figure was now 25,000. What has happened to the other 5,000 jobs in that short period of 10 or 11 months? It is suggested that 11,000 jobs have been taken by Southend, but it would be a terrible condemnation of the Government's hypocrisy and their pretence to care about regional development if 11,000 jobs were found to have gone to Southend because of the transfer of Government offices there, for by one such move they would have taken employment opportunities from the development areas.
The Opposition ought to make their protest about the abolition of investment grants. This is a sorry day, a day which will be long remembered by many in the development areas. They have known the Tory Party well for many years and they do not need speeches from my hon. Friends and me to tell them how cavalierly Tories treat their election


promises. But there are some hon. Members opposite tonight who will not stand the test of the next election.

1.22 a.m.

Mr. T. W. Urwin: I address myself immediately to the most contentious aspect of the Bill, which is undoubtedly the proposed abolition of investment grants. Earlier tonight, hon. Members opposite eloquently argued the justice of the case made on behalf of Cleveland Potash, although they did not carry their support into the Lobby.
My hon. Friend the Member for Chesterfield (Mr. Varley) went to some lengths to demonstrate the decline of confidence among industrialists in the development areas as a result of the Government's policy, especially the withdrawal of investment grants. No one, certainly not on this side of the House, will overstate the situation which has developed over the last few months, but the forecasts of the C.B.I. and the T.U.C. have been well justified.
There have been criticisms from people in the development areas, from those who are at the centre of these policies, people who had looked forward to the possibility of being able to resume employment as a result of the policies of the Labour Government. But it is undeniable that over the past few months the confidence of those most directly involved has markedly waned.
Since last June, some of us have questioned Ministers, especially those from the Department of Trade and Industry, about the efficacy of their policies and about the prospects resulting from a withdrawal of investment grants and the general package which the Government are now operating under the guise of a regional policy.
It is a gross understatment to say that that policy is not succeeding. Month after month, quite distinct and apart from the success achieved by the Labour Government, not only is the number of inquiries by industrialists decreasing, but, at the other end of the scale, in terms of jobs being produced for people hungrily awaiting them, the news is extremely disheartening.
Despite the limited time at my disposal, I cannot refrain from drawing

attention, as did my hon. Friends from Scotland and Wales, to the serious situation in the Northern Region. My right hon. Friend the Member for Sunderland, North (Mr. Willey) spoke briefly, but nevertheless movingly, about the crisis of confidence on Teesside. The House should know that there is a crisis of confidence throughout the Northern Region. I have no doubt, from what has been said in this debate and on Report, that this will be reflected in Scotland and Wales, on Merseyside and, indeed, in the South-West and all the other development areas.
Today my confidence has been further undermined as a result of the evidence which has been presented by the Minister for Industry. Under the Labour Government's policies the Northern Region in 1968—this may have had some connection with the fact that since 1967 we had a Minister with special responsibility for the North—after being some way down the league table in terms of job procurement, through the medium of I.D.C.'s, leapt to the top of that table and held that position until 1970. The figures for April and May in the years 1968, 1969 and 1970 show an all-time record of 5,003 jobs estimated to have accrued as a result of industrial development certificates which had been approved.
Against that we have the appalling figures, released today, for the same two months of this year of 410 jobs in a region where over 70,000 men are unemployed and waiting for jobs. The new jobs expected to accrue in those two months, against an average over the previous three years of 4,518, are a miserable, squalid 410. This is the measure of the slackening of confidence in the policies applied by this Government.
I am on record on previous occasions in this Chamber and in Committee as saying that the investment grant system was the linchpin of the Labour Government's policies in terms of procurement of new industry and the disbursement of industry throughout the development areas. Its removal is having drastic consequences in these regions.
I want to sound a serious warning note to right hon. and hon. Gentlemen opposite, from the Prime Minister down. If they read this morning's Newcastle Journal they will see the justification for what I am saying. Deep and serious


concern is being expressed by journalists, industrialists, local authority representatives, and many other people who have any interest in the relief of the dreadful problem of unemployment. They will read that the T.U.C. is to organise demonstrations in the areas of highest unemployment—and it need not go outside the Northern Region to find those areas. Sunderland is quoted as a ready-made centre for such a demonstration. There is talk about demonstrations in other parts of the country and organising a march on London.
I shall never forget the Jarrow march of 1936. Some of my friends who are still alive were among the organisers and leaders of that march. Without wishing to appear pessimistic, I warn right hon. and hon. Gentlemen opposite that there is a fear in the Northern Region today that a repetition of the Jarrow march of 1936 is under way. This is largely due to the situation which has been allowed to develop under the Government's callous policies which completely disregard the needs and requirements of people to work for their living. In this context the Bill is a nonsense and should be withdrawn.

1.30 a.m.

Mr. Michael Foot: I shall speak very briefly, but I think that everyone who has listened to the debate must recognise how strongly we on this side of the House feel about this Measure and about the evil consequences which we think it has already had, and which it is likely to have in the future.
I should first make one further comment on the debate on the question of the mining industry, and the particular position referred to by the hon. Member for Middlesbrough, West (Mr. Sutcliffe) and others who have mentioned this matter. The Minister, in replying to the debate, seemed to talk as though only a few firms were involved. The Amendment referred to the circumstance that might alleviate the position of the few firms concerned, but the fact is that investment grants altered the whole prospect of deep mining in this country. It was one of the imaginative measures which helped those who were thinking of engaging in projects of this kind to realise that they had a proper prospect of capital ahead. It is therefore not only a question of remote firms that may be

involved. The abolition of investment grants is a way of setting back the whole possibility of the much wider use of deep mining in different kinds of industry, as I sought to illustrate on Second Reading, and as others have shown since.
My hon. Friends the Members for Bedwellty (Mr. Kinnock), Carmarthen (Mr. Gwynoro Jones), and Houghton-le-Spring (Mr. Urwin), and all those who come from development areas, believe that the withdrawal of investment grants is having a most serious effect on our constituencies. We worked for one of the major firms to come to Ebbw Vale. We struggled for, argued for, and made every effort that we could, to encourage the firm to go there, and when we obtained its agreement to come we thought that that signalled a change in our fortunes, because it is a struggle to get new industries to go to these areas. That new industry is not now going to my area, not necessarily solely as a result of the withdrawal of investment grants—we are not claiming that—but obviously it is one of the factors that has led to the decision.
If the hon. Gentleman does not think that many of the firms are affected, he should ask them, and give us a full report of what the 52 firms say. My hon. Friend the Member for Bedwellty has told us their view, but let the Minister find out for himself. Nobody will be able to estimate how many firms will be deterred. We bitterly resent this Measure.
We believe that it is scandalous that the Government should have gone ahead with a Measure of this character, without the deep study which they had promised, solely on the basis of the previous undertakings they had given. It is even worse, perhaps, that they have pressed the Measure through the House in almost exactly its original form, except for the one major concession about the shipping industry, without any recognition of the representations that have been made by hon. Members who have had direct experience of how the withdrawal of these grants has injured the prospect of employment in their areas.
There is, of course, one difference since the moment when the Bill was originally introduced. The recession has become deeper. The fear that the recession may change into something which could be described as a slump has grown in every


area of the country, particularly in Wales, Scotland and the North-East, but not only there, in the City columns, too; and the Government have thrown away the weapon which they could have used in such a situation. The result is that they have had to press the Bill through the House, even though they know that measures must be taken very soon to try to prevent a situation where we would be heading for a full, major recession. That is what confronts the country at present, and, if recession sweeps the whole country, the development areas will be plunged back into the kind of situation described by my hon. Friend the Member for Houghton-le-Spring. That is the fear throughout the development areas, and what the Government have done, in ignorance or maybe in malice against what had been done by a Labour Government, is to push through this Measure.
We should prefer not to see our prophecies fulfilled. If there is anything worse than the cruelty of unemployment or the wastefulness of it, it is that unemployment makes more difficult the solution of every other industrial problem facing the country. If we are to be plunged into a situation in which we have a million or more unemployed, it will be infinitely more difficult to solve all the technological and industrial problems that the nation has to face.
This Measure, introduced when it was, was one of the contributory factors in producing the recession with which this Government show themselves so utterly incapable of dealing. For that reason,

we say that the Measure fits the pattern of what they are doing. It is a weapon which is deepening the fear of unemployment from one end of the country to the other. Therefore, we shall vote against the Bill, as we shall against the other measures that this Government have produced.

Right hon. and hon. Gentlemen opposite have claimed—it is almost the only argument of the Prime Minister—that it is the pressure for high wages which causes unemployment. This Bill is the proof that it is Government measures which produce unemployment. It is one Government measure after another and one Government failure after another which is producing unemployment. That is what people know in the country.

It was the withdrawal of investment grants which had the direct effect of kicking people out of jobs, and I refer again to the case of the Tredegar Mining Company in my constituency. It was not pressure for high wages which produced that unemployment. There are hundreds of cases in the country where this Measure has already thrown people out of work and where, if it is persisted in, hundreds more will follow in its wake.

We shall vote against this Measure. It is part of the policy of this Government of not merely failing to deal with the problem of unemployment but of taking positive measures to make it worse still.

Question put, That the Bill be now read the Third time:—

The House divided: Ayes 150, Noes 92.

Division No. 388.]
AYES
[1.38 a.m.


Adley, Robert
Crouch, David
Grylls, Michael


Allason, James (Hemel Hempstead)
Curran, Charles
Gummer, Sefwyn


Atkins, Humphrey
Dean, Paul
Garden, Harold


Benyon, W.
Deedes, Rt. Hn. W. F.
Hall, Miss Joan (Keighley)


Biffen, John
Digby, Simon Wingfield
Hall-Davis, A. G. F.


Blaker, Peter
Dixon, Piers
Hannam, John (Exeter)


Boardman, Tom (Leicester, S. W.)
Drayson, G. B.
Harrison, Col. Sir Harwood (Eye)


Boscawen, Robert
Eden, Sir John
Haselhurst, Alan


Bowden, Andrew
Edwards, Nicholas (Pembroke)
Hawkins, John


Bray, Ronald
Elliott, R. W. (N'c'tle-upon-Tyne, N.)
Hicks, Robert


Brewis, John
Emery, Peter
Hill, John E. B. (Norfolk, S.)


Brinton, Sir Tatton
Farr, John
Hill, James (Southampton, Test)


Brocklebank-Fowler, Christopher
Fenner, Mrs. Peggy
Holt, Miss Mary


Bryan, Paul
Fidler, Michael
Hornby, Richard


Butler, Adam (Bosworth)
Finsberg, Geoffrey (Hampstead)
Howell, David (Guildford)


Carlisle, Mark
Fowler, Norman
Howell, Ralph (Norfolk, N.)


Channon, Paul
Fox, Marcus
Hunt, John


Chapman, Sydney
Gibson-Watt, David
James, David


Chataway, Rt. Hn. Christopher
Goodhart, Philip
King, Evelyn (Dorset, S.)


Chichester-Clark, R.
Goodhew, Victor
King, Tom (Bridgwater)


Clegg, Walter
Gower, Raymond
Kinsey, J. R.


Cockeram, Eric
Grant, Anthony (Harrow, C.)
Kitson, Timothy


Cormack, Patrick
Green, Alan
Knight, Mrs. Jill




Knox, David
Normanton, Tom
Stuttaford, Dr. Tom


Lane, David
Onslow, Cranley
Sutcliffe, John


Legge-Bourke, Sir Harry
Osborn, John
Taylor, Sir Charles (Eastbourne)


Le Marchant, Spencer
Owen, Idris (Stockport, N.)
Taylor, Edward M.(G'gow, Cathcart)


Longden, Gilbert
Page, Graham (Crosby)
Taylor, Frank (Moss Side)


Loveridge, John
Parkinson, Cecil (Enfield, W.)
Taylor, Robert (Croydon, N. W.)


Luce, R. N.
Pink, R. Bonner
Thomas, John Stradling (Monmouth)


MacArthur, Ian
Pounder, Rafton
Thompson, Sir Richard (Croydon, S.)


McCrindle, B. A.
Powell, Rt. Hn. J. Enoch
Trafford, Dr. Anthony


McLaren, Martin
Pym, Rt. Hn. Francis
Trew, Peter


Maginnis, John E.
Raison, Timothy
Tugendhat, Christopher


Mather, Carol
Redmond, Robert
Turton, Rt. Hn. Sir Robin


Mawby, Ray
Reed, Laurance (Bolton, E.)
van Straubenzee, W. R.


Maxwell-Hyslop, R. J.
Rees-Davies, W. R.
Vaughan, Dr. Gerard


Mills, Stratton (Belfast, N.)
Renton, Rt. Hn. Sir David
Waddington, David


Mitchell, Lt.-Col. C.(Aberdeenshire, W)
Ridley, Hn. Nicholas
Walder, David (Clitheroe)


Moate, Roger
Roberts, Michael (Cardiff, N.)
Walker, Rt. Hn. Peter (Worcester)


Molyneaux, James
Roberts, Wyn (Conway)
Ward, Dame Irene


Monks, Mrs. Connie
Rossi, Hugh (Hornsey)
Warren, Kenneth


Monro, Hector
Russell, Sir Ronald
Weatherill, Bernard


More, Jasper
Scott, Nicholas
Wells, John (Maidstone)


Morgan, Geraint (Denbigh)
Sharpies, Richard
White, Roger (Gravesend)


Morrison, Charles (Devizes)
Shaw, Michael (Sc'b'gh &amp; Whitby)
Wilkinson, John


Mudd, David
Shelton, William (Clapham)
Worsley, Marcus


Murton, Oscar
Skeet, T. H. H.
Wylie, Rt. Hn. N. R.


Nabarro, Sir Gerald
Soref, Harold
TELLERS FOR THE AYES:


Neave, Airey
Spence, John
Mr. Tim Fortescue and


Nicholls, Sir Harmar
Stanbrook, Ivor
Mr. Keith Speed.




NOES


Allaun, Frank (Salford, E.)
Heffer, Eric S.
O'Malley, Brian


Ashton, Joe
Horam, John
Orme, Stanley


Atkinson, Norman
Howell, Denis (Small Heath)
Owen, Dr. David (Plymouth, Sutton)


Benn, Rt. Hn. Anthony Wedgwood
Hughes, Mark (Durham)
Parry, Robert (Liverpool, Exchange)


Booth, Albert
Jones, Barry (Flint, E.)
Pavitt, Laurie


Brown, Bob (N'c'tle-upon-Tyne, W.)
Jones, Gwynoro (Carmarthen)
Pendry, Tom


Brown, Ronald (Shoreditch &amp; F'bury)
Jones, T. Alec (Rhondda, W.)
Perry, Ernest G.


Carmichael, Neil
Judd, Frank
Prescott, John


Carter, Ray (Birmingh'm, Northfield)
Kaufman, Gerald
Reed, D. (Sedgefield)


Clark, David (Colne Valley)
Kerr, Russell
Roderick, Caerwyn E.(Br'c'n&amp;R'dnor)


Concannon, J. D.
Kinnock, Neil
Rodgers, William (Stockton-on-Tees)


Cox, Thomas (Wandsworth, c.)
Lambie, David
Roper, John


Davies, Ifor (Gower)
Lamond, James
Ross, Rt. Hn. William (Kilmarnock)


Davis, Clinton (Hackney, C.)
Latham, Arthur
Sandelson, Neville


Davis, Terry (Bromsgrove)
Lestor, Miss Joan
Sillars, James


Deakins, Eric
Mackenzie, Gregor
Silverman, Julius


Dell, Rt. Hn. Edmund
Mackie, John
Skinner, Dennis


Douglas, Dick (Stirlingshire, E.)
Mackintosh, John P.
Smith, John (Lanarkshire, N.)


Dunn, James A.
Maclennan, Robert
Spearing, Nigel


Eadie, Alex
Mahon, Simon (Bootle)
Spriggs, Leslie


Evans, Fred
Marquand, David
Stallard, A. W.


Fletcher, Ted (Darlington)
Marsden, F.
Stoddart, David (Swindon)


Foot, Michael
Marshall, Or. Edmund
Urwin, T. W.


Fraser, John (Norwood)
Mason, Rt. Hn. Roy
Varley, Eric G.


Freeson, Reginald
Meacher, Michael
Wainwright, Edwin


Golding, John
Mellish, Rt. Hn. Robert
Wallace, George


Grant, John D. (Islington, E.)
Mendelson, John
Weitzman, David


Hamilton, William (Fife, W.)
Mikardo, Ian
Wellbeloved, James


Hamling, William
Mitchell, R. C. (S'hampton, Itchen)
Whitehead, Phillip


Hardy, Peter
Mulley, Rt. Hn. Frederick
TELLERS FOR THE NOES:


Harper, Joseph
Ogden, Eric
Mr. Ernest Armstrong and


Harrison, Walter (Wakefield)
O'Halloran, Michael
Mr. James Hamilton.

Bill accordingly read the Third time, and passed.

RENT ASSESSMENT COMMITTEES (HEARINGS)

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Clegg.]

1.47 a.m.

Mr. Michael Barnes: I am glad of this opportunity to raise the subject of the need for further regulations governing the conduct of rent assessment committee hearings. The regulations I am seeking would require such committees—in cases where they publish in written form their decisions and the reasons for making them—to summarise all the evidence they hear, both the evidence given on behalf of the tenants and that given on behalf of the landlords, before reaching their final conclusions.
I am raising this issue because I am particularly concerned at the way in which London rent assessment committees appear to be arriving at their decisions. I have with me an extraordinary document giving the decisions and reasons of the London Rent Assessment Committee in determinations it made concerning eight flats at Sutton Court in Chiswick, in my constituency.
This document consists of 14 pages, 12 of which comprise evidence submitted on behalf of the landlords. The tenants were represented by counsel at the hearing in question before this committee, but there is no mention in the document of any cross-examination, though it took place, of the landlords' witness by the tenants' counsel. There are no references to any of the arguments adduced on behalf of the tenants. There is merely this one sentence:
Mr. Sedley … counsel for the tenants … informed the Committee that his clients had instructed him to accept the figures for Fair Rent registered by the Rent Officer in respect of each property".
Apart from that, there is no reference to what was submitted on behalf of the tenants. I say that this is an extraordinary document because I believe that it makes a mockery of the intentions of the Rent Act, for reasons which I shall show.
The landlords in this case are the Freshwater Group of Companies, one of the biggest landlords of private rented accommodation in the country. I will not dwell on the Freshwater operation.

It was the subject of an inquiry in the Sunday Times on 8th November, 1970. I would just say that their operation is clearly a very slick one designed to get maximum benefit out of the Rent Act for the company rather than to work within the spirit of the Act. They rely to a considerable extent on ignorance of the Rent Act among their tenants, and when leases fall in and they offer new leases it appears to be their practice to ask for very big increases in rent in the hope that tenants are unaware of their rights under the Act. This has caused a lot of distress, particularly to some elderly tenants in Sutton Court, Chiswick.
It is also their practice, so it appears, when they grant new tenancies, to say to the prospective tenants that they will get the tenancy only if the tenant agrees to make a joint application with Freshwaters to the rent officer for a fair rent to be fixed—and the tenant will get the flat only on that basis. This is a useful device from Freshwater's point of view because if the application to the rent officer is a joint application, it is possible for the rent to be re-registered within three years of any previous registration.
I should like to look in detail at three of these eight flats at Sutton Court, Nos. 67, 131 and 135. In the case of these three flats the previous registrations were respectively £225, £250 and £230 rent per annum. The flats were then let to new tenants, on condition that there would be this joint application to the rent officer, for rents of £425, £475 and £450 respectively. The rent officer then fixed the rents at £300, £285 and £300 respectively. The Rent Assessment Committee then registered the rents at £332, £338 and £332 respectively.
The percentage increases, that is, the increase in the rent fixed by the Rent Assessment Committee over the previous registration, are 47·5, 35·2 and 44·3 respectively.

Mr. Evelyn King: As the hon. Gentleman has given that percentage increase, could he say when was the last registration? Over how many years does that increase apply?

Mr. Barnes: The registrations are no more than three years ago, and two of them are just within the three-year period. To be fair, I was about to point


out that two of the flats, Nos. 67 and 135, had about £700 worth of repairs done to them before they were let to the new tenants, so because of that, let us concentrate on flat No. 131 which did not have that kind of money spent on it. I do not think that any money was spent on repairs before it was let to the new tenant. The rent officer raised the rent of flat No. 131 by 14 per cent. when asked to fix a fair rent. But the Rent Assessment Committee fixed a rent which was 35 per cent. above the previous registration. This registration was just within the three-year period. That is a 35 per cent. increase in rent within a three-year period. In other words, the Rent Assessment Committee more than doubled the increase fixed by the rent officer, and its increase of 35 per cent. was far in excess of any figure by which it could be said that rents had increased during the three-year period.
I come to the question of the evidence in this decision and the reasons. There is no reference to the cross-examination of the landlords' witness by the tenants' counsel. There is no reference, either, to the fact that the new tenants of the three flats were granted the leases only on the condition that they were willing to sign a document agreeing to make a joint application to the rent officer. The tenants thought that this was a very important point, because they thought that the fact that they had been forced to agree to make a joint application to the rent officer prejudiced their case before the Rent Assessment Committee and they thought that the Committee should have taken careful note of the fact that they made that joint application only under duress.
I took up this question with the President of the London Rent Assessment Panel. He, after corresponding with the Chairman of the Committee concerned, replied as follows:
Mr. Sedley"—
that is the tenants' counsel—
did cross-examine Mr. Musto"—
that is the landlords' witness—
on a number of points which were not material to the decision and were not therefore included.
Mr. Sedley did make a comment that the tenants were under pressure to sign the application forms to the Rent Officer or else they would not get their flats. This was not included

in our decision as it had no bearing upon the determination by the Committee of the fair rents.
In other words, none of the evidence submitted on behalf of the tenants had any bearing on the Committee's decision but 12 pages of the landlords' evidence was presumably highly relevant to the Committee's determination.
Page 2 of the evidence says this
As a result of the change of ownership a more positive form of management policy has been introduced.
As an example of this more positive management on page 3 are set out a whole lot of covenants which the new landlords included in the new leases and which they claim were not in the previous leases granted by the Norwich Union Life Insurance Society, the previous landlords. These covenants involved such things as keeping the gardens or open spaces neat and tidy, employing certain porters and caretakers, keeping the structure in repair, maintaining the estate roads, and lighting the common entrances. It may be that the covenants were not in the Norwich Union leases, but the tenants assure me that none of these things is in any way different or better under the so-called more positive management of the Freshwater Group of companies than it was under the Norwich Union.
I could go on throughout the 12 pages of landlords' evidence and pick similar holes in many of the arguments there advanced. It is worrying that it should be possible to do this, because clearly the Rent Assessment Committee was greatly influenced by these 12 pages of evidence, because the President of the London Rent Assessment Panel has said that these pages of evidence would not have been included in the committee's decision and reasons if they had not been highly relevant.
I therefore believe that this is a situation which the Minister should regard as serious, because there is already a feeling among tenants, certainly in London, that besides the huge expertise that big property companies like Freshwater can bring to bear, tenants just do not stand a chance before rent assessment committees. This case is a classic example of that. It seems to bear out that feeling almost exactly and it can only help to strengthen the feeling that many people


already have about rent assessment committees in London.
I believe that the Committee has dealt with those eight cases in an extremely perfunctory manner. It has swallowed the landlord's case whole and has not bothered to include in its decision and reasons a single word of evidence put forward on behalf of the tenants.
Therefore, I ask the Minister, first, to make clear to the committees that they are not fulfilling their functions under the Rent Act if they publish decisions and reasons in that way, and, second to reinforce his representations to them by introducing before Parliament the regulations to which I referred at the beginning of the debate, requiring rent assessment committees to set out all the evidence put before them fairly in the written decision and reasons which they publish. If this is done, at least tenants will be able to feel that the evidence they put have put forward has been properly considered.
I am very much afraid that the tenants in the case of the eight flats in Sutton Court in Chiswick are totally unable to feel that their evidence was properly considered.

2.1 a.m.

The Under-Secretary of State for the Environment (Mr. Paul Channon): Before dealing with the case which the hon. Member for Brentford and Chiswick (Mr. Barnes) has made with regard to his constituents in Sutton Court, Chiswick, I must point out that tribunals such as Rent Assessment Committees are independent bodies which come to their decisions on the basis of the evidence put to them, and taking into account any other facts that they consider relevant. It is not for me to comment on the merits of any decision they make, nor is it right for the House to attempt to retry decisions made.
I am extremely sorry that the hon. Gentleman should have used this occasion to make a general attack on the working of Rent Assessment Committees, which I believe are generally recognised, as was shown by the unanimous report of the Francis Committee on this issue, to be working well and fulfilling their difficult duties in an extremely fair manner.
Of course, any system can be improved, but I believe that the rent assessment

committee system and the fair rent system in general are working well, was borne out by the Francis Committee Report.
The case raised by the hon. Gentleman concerns the determination of fair rents for eight flats in Sutton Court, Chiswick. In January and February, 1970 the landlords and tenants made six joint applications to the rent officer. In the two remaining cases the tenants applied to the rent officer for the registration of a fair rent following the renewal of their leases at a higher rent.
In every case the rent officer registered a fair rent which was lower than the rent requested either in the joint applications or in the two cases where the tenants requested a registration. Irrespective of whether a rent registration is applied for jointly or by one of the parties, the rent officer has a statutory duty to ensure that the rent he registers is the rent he considers to be fair. The fact that an application is made jointly in no way detracts from that duty. The only criterion is whether the rent is fair. It makes not a scrap of difference whether it is a joint application or an application by one of the parties.
Following the rent officer's determination, the landlords appealed to the Rent Assessment Committee. One registration was, by the agreement of all the parties concerned, withdrawn, and so the committee in fact considered seven cases. The hearing took place on 17th November last year, when the committee determined fair rents which were higher than those registered by the rent officer but generally substantially lower than those originally requested. I can send the hon. Gentleman the facts of that if his impression is different.
Subsequently the hon. Gentleman wrote to the President of the London Rent Assessment Panel about the terms of the decision letter issued by the Committee. The President replied in the terms which have been quoted to the House. It is not for me to comment on the decision of the assessment committee, which is an entirely independent body, and such committees take a great deal of trouble and are generally respected for the work they do. Any part that is aggrieved by a decision may appeal on a point of \aw to the High Court, but this must be


done within 28 days of the issue of the decision letter.
At the hearing three expert witnesses were called by the solicitors acting for the landlords. These were cross-questioned by the tenants' counsel. I would point out that the tenants were represented by counsel, and it was a little unfair of the hon. Gentleman to imply that the tenants were not adequately represented.

Mr. Barnes: I think the hon. Gentleman has misunderstood what I said. At no stage did I imply the tenants were not adequately represented. I said that the cross-examination which their counsel carried out, indeed his whole case, was not referred to in a single word of the decision.

Mr. Channon: I shall come to the decision letter in a moment. What the hon. Gentleman said was that in cases of this kind it was unfortunate that the great property companies could use professional witnesses and had counsel at their service, but that the poor tenants were not represented. These tenants in fact were represented by counsel.
Several of the tenants were also called by counsel to answer questions about the standard of the provision of services and other matters. The decision letter, however, very largely consists of what was said in evidence by one of the expert witnesses called by the landlord's solicitors and refers very briefly to the tenants being satisfied with the rent officer's determination.
One can only presume that the Committee considered this evidence to be the most important and that other matters raised were, in their opinion, either not relevant or, since the landlords were present, points raised by the tenants could be noted by them and therefore did not need to be included in the decision letter. Indeed, this is the gist of the comments made by the Chairman of the Committees and passed on to the hon. Member by the President of the London Rent Assessment Panel.
I can well understand and sympathise with the tenants' concern that the terms of the decision letter would seem to suggest that the Committee had not considered sufficiently their side of the case. I have no reason to doubt that the Committee acted fairly, but I accept that the

wording of the decision letter could, and apparently did, give another impression.
The hon. Gentleman was interested in the statutory position. The Rent Act, 1968, in Schedule 6, paragraph 9(2), deals in part with the determination of a fair rent by a Rent Assessment Committee. The particular paragraph 9(2) states:
Where the committee confirm or determine a rent under this paragraph they shall notify the landlord, the tenant and the rent officer accordingly.
This does not specify that reasons for any decision be given. But Rent Assessment Committees are tribunals within the meaning of the Tribunals and Inquiries Act, 1958. Section 12(1) of that Act states that the tribunals specified are duty bound, except in wholly exceptional cases, to give reasons for their decisions if requested to do so.
Evidence given to the Francis Committee pointed out Rent Assessment Committees vary in their practice as regards giving of decisions. The Committee found that Rent Assessment Committees outside London often announced their decisions orally, with reasons, after the close of the argument and in such cases did not always furnish the parties with a written statement of the reasons for the decision. In London the Committee found that it was the practice to give a written decision with reasons in every case and a copy was sent to every party. I hope, therefore, that the hon. Member will accept that if he does not consider that the giving of reasons was adequate in this case, that it is nevertheless the normal practice to ensure that the parties concerned do receive reasons.
The question of giving satisfactory reasons for a decision fixing a fair rent is not a new one. It is clear that such reasons should go beyond the mere statement that the rent fixed is that which the committee has arrived at by applying the "fair rent" formula in Section 46 of the Rent Act.
Although it is sometimes far from easy to give reasons for valuing something at a particular level, an attempt is generally made to state the committee's view on any particular issues which arose at the hearing. There have been High Court decisions adjuring Rent Assessment Committees to give adequate reasons, and indeed the President of the London Rent


Assessment Panel has drawn the attention of all members of his panel to such decisions, and has always stressed that decisions should deal with any material relevant to the Committee's conclusions.
The London President holds regular meetings of his panel members, at which he discusses with them any matters affecting the conduct of Rent Assessment Committee work in general and any criticisms made of the functioning of these committees. I am sure he will consider carefully if anything further can be done to help towards the aim that justice will not only be done but will be seen to be done. I will write to him and draw his attention to the hon. Gentleman's remarks.
The hon. Member will also be interested to know that my right hon. Friend intends to lay before the House very shortly new Regulations governing the procedure to be followed by Rent Assessment Committees at their hearings. The proposed Regulations specify that the decision should be given with reasons. These Regulations will largely spell out what is in fact existing practice. For example, it is general practice that London Rent Assessment Committees do give reasons for their decisions in their decision letters.
The regulations will also provide—I will not go through the list—that parties at a hearing shall have the right both to give evidence on their own behalf and to cross-examine any witnesses called by the other party; they deal with a whole host of matters.
These regulations are the outcome of full discussions between panel presidents, the Council on Tribunals and the Department, and I hope that the hon. Member will find them satisfactory.
May I take up, briefly, on important point raised by the hon. Member. This is the suggestion that the Landlords make it a condition in the granting of a new tenancy that the tenant sign a joint application for the registration of the agreed rent by the rent officer. As I have pointed out, the rent officer is duty bound to register a rent for a dwelling which he considers to be fair and the fact that it is a joint application which he is considering does not affect this.
Secondly, though a tenant may have agreed a rent with his landlord without

going to the rent officer, he is fully entitled, following for instance, greater knowledge of fair rent levels in his area, to go to the rent officer at any later date and ask for a fair rent to be determined. May I also emphasise that irrespective of any disagreement over rent, any sitting tenant has security under the Rent Act and the fact that a rent officer may be determining a fair rent for his dwelling does not affect his security in any way.
The hon. Member made another point which rather surprised me, when he said that if a joint application was made to a rent officer a person could seek re-registration within three years. Section 44 of the 1968 Rent Act specifies that three years should elapse, unless there is a change of circumstances, before a new registration can take place. The fact that it was a joint application makes no difference. It is exactly the same as if it was an application made by one or other of the parties. The hon. Member need not be concerned about the practice of making joint applications, because it does not prejudice the position later if a tenant wishes to go to the rent officer. The rent officer has to consider what is the fair rent for that particular dwelling. That is the sole criteria he uses, irrespective of whether it is a joint application, or one made by an individual.
On the hon. Gentleman's point about the wording of decision letters, I shall certainly draw the attention of the President of the London Rent Assessment Panel to his remarks. Dealing with his general point about the need for further regulations governing the conduct of these hearings, independent of his action this evening, the Government had already decided to lay such regulations and they will be available shortly. I hope that the hon. Gentleman will find that they are satisfactory. They have been the subject of detailed discussions, and I believe that they will be in the interests of all parties at these hearings. I agree with the hon. Gentleman that while justice is done at these hearings, it is equally important that it should be seen to be done. That is certainly the aim of all rent assessment committees.

Question put and agreed to.

Adjourned accordingly at a quarter past Two o'clock.